QUESTION

Is a successor trustee/beneficiary required pay debt he owes to an irrevocable family trust?

Asked on Mar 15th, 2022 on Trusts and Estates - California
More details to this question:
Hi, About 10 years ago, my father placed all of his assets into a California revocable family trust (pour-over). As a part of this he appointed my sister as successor trustee and she signed the trust documents affirming this. She and I are the sole beneficiaries. A couple of years later she borrowed substantial sums of money from him - which she never repaid. In addition, he guaranteed a credit card for her, which she defaulted on, requiring him to pay. There is no mention of this in any trust or will documents. My question is as follows - Does she have an obligation to disclose this as a debt owed to the trust, and, if so, would it effect trust distributions? The trust is to be dissolved upon distribution of assets. Thanks, Brand
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1 ANSWER

Real Estate Law Attorney serving Los Angeles, CA at Law Office of David A. Schechet
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If the money given to your sister was in fact a loan and not a gift, then the trustee has an obligation to collect all money do it.  Does she have a statute of limitations defense?  Additional facts are needed.
Answered on Mar 16th, 2022 at 12:59 AM

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