QUESTION
Can I file for an accounting and the Trust dcument for an Irrevocable Trust that I am sole beneficiary of, but never knew about?
Asked on May 31st, 2013 on Estate Planning - North Carolina
More details to this question:
I am in litigation now regarding theft from a 1994 Trust I am the sole beneficiary to. Just recently, I called the bank trying to find any information on the 1994 Trust. They asked which irrevocable trust was I talking about the one with my mother as trustee or the one with my father. My father was settlor to both these Trusts, but appointed my mother trustee of 1978 Trust, however she never was made aware she was Trustee of this trust. In 1994, second trust was created as settlor was restructuring his company and he made himself trustee of that one. It appears he pulled over a million dollars out of 1978 Trust and swapped shares that were overvalued by 5 times as something of equal or greater interest to get money from the 1978 Trust. He was CEO and owner of company. In 1996, company was sold and netted a 49 million profit. If my 1978 Trust was used to purchase those shares, I should have netted 5 million in 1996. I found out in 2003 the bank received a typed document that is still on file, transferring the assets of the 1978 Trust into the 1994 Trust and supposedly signed by my mother. The transfer does not show in the 1994 accounting. My father (the settlor) admits this trust existed, but can't remember what happened to it or where the Trust document is. I was a minor at the time this Trust was created and never received any accounting or had any knowledge this trust existed until recently. What are my legal rights if the trustee can't produce the Trust document or any accounting? This issue is in Pennsylvania.
1 ANSWER
First, do you have a copy of the trust instrument? And are one or both of your parents still alive? Where was the trust created? In PA? You indicate that you are "in litigation." What does that mean? If a lawsuit about the trust has been filed it would mean that you have an attorney. In such case its not ethical for me or anyone else to discuss these issues with you other than your attorney. If you do not have a copy of the trust it could be subpoenaed. And if its irrevocable, it would suggest that a lawyer was involved in drafting it. If nothing else, the lawyer who drafted it can have his files subpoenaed if they still exist and there may be a copy there. Once you get the trust read it. The trust will spell out when an accounting has to be provided. I draft revocable trusts that provide that if the settlor is still alive then there does not have to be an accounting. There may be a provision like that in the trust. If that is the case then your father has no duty to provide any sort of accounting to you. If the trust is silent, then read the trust to see what law governs its interpretation and then review the trust code for that state. In the states where I am admitted, the state may have laws which say how often an accounting must be made. Usually, its once per year and only a beneficiary of the trust can demand it. Below is the statute for PA. If the settlor, your father is still alive, I am not sure that your father had any duty to report to you at all. The statute seems to suggest that the duty to report only commences when the settlor is adjudicated incompetent or dies. Again, if you have a trust litigation attorney, then you need to discuss this with him/her. If you don't have one then you need to get one. 20 Pa.C.S.A. ? 7780.3 - Trusts - Duties and Powers of Trustee - Duty to inform and report (a) Duty to respond to requests.A trustee shall promptly respond to a reasonable request by the settlor of a trust or by a beneficiary of an irrevocable trust for information related to the trust's administration. A trustee shall promptly respond to the Department of Public Welfare's reasonable request for information related to the trust's administration when a settlor or beneficiary is a resident in a State-owned facility or an applicant for or recipient of cash or medical assistance from the Commonwealth and the department certifies in writing that it has obtained a currently valid consent for the disclosure of such information from the settlor or beneficiary of the trust. A trustee may rely upon the department's certification without investigating its accuracy.(b) Notice after settlor of revocable trust has been adjudicated incapacitated.No later than 30 days after the date on which the trustee of a revocable trust learns that the settlor has been adjudicated incapacitated, the trustee shall send the notice described in subsection (i) to the settlor's guardian.(c) Notice after settlor of revocable trust has died.No later than 30 days after the date on which the trustee of a revocable trust learns that the settlor has died, the trustee shall send the notice described in subsection (i) to:(1) the settlor's personal representative;(2) the settlor's spouse or, if the settlor's spouse is incapacitated, the spouse's guardian;(3) each of the settlor's children who is sui juris and the guardian, if any, of each child who is not sui juris; and(4) the trust's current beneficiaries.(d) Notice after settlor of irrevocable trust has been adjudicated incapacitated.No later than 30 days after the date on which the trustee of an irrevocable trust learns that the settlor has been adjudicated incapacitated, the trustee shall send the notice described in subsection (i) to the trust's current beneficiaries. A revocable trust shall not be deemed irrevocable for the purposes of this subsection merely because the settlor has been adjudicated incapacitated.(e) Notice after settlor of irrevocable trust has died.No later than 3
Answered on Jun 03rd, 2013 at 9:47 PM