Legal Question in Wills and Trusts in New York
Charitable Remainder or remainder which is a charity -- trustee ripping off curr
My father's will established a trust for the benefit of his than living childern to provide ''education, support and maintenance''. The bank trustee was instructed to ''INVEST and REINVEST assets so as to provide for appropriate distributions from principal AND income to the beneficiary children. The bank trustee says that they have a benchmark for investments of 70/30 equity to income ratio, that their primary purpose is to ''GROW'' the trust for benefit of the remainder which is a charity. This is not a formal charitable remainder, not a CRUT, not a CRAT which mandate 5 % minimums depending on type -- just a remainder that is a charity. My father took no tax deduction.The estimated payout is 2.05 percent after thay take their fees. The bank is stating that we must also prove need. We live in an expensive neighborhood, but they want us to go through our resources, first. The bank says distributions from principal is out of the question and that they have absolute discretion. Value of trust is in millions.
2 Answers from Attorneys
Re: Charitable Remainder or remainder which is a charity -- trustee ripping off
The father's Will, along with New York law, governs the conduct of the bank trustee here. The substantive provisions in the Will need to be reviewed and the facts need to be developed further in order to properly evaluate the options available. The concept of "education, support and maintenance" was established long ago under New York law and there are many NY court decisions involving the concept, most of which depend on the unique facts of the particular case.
The Trust Officer at the bank can ask for information that justifies a distribution in order for the Bank Trust Officer/Committee to reach a decision that a distribution is proper because it is for "education, support and maintenance". The beneficiary's standard of living and assets can be taken into account.
There are a number of issues here under NY law that need to be carefully considered and dealt with concerning the administration of the Trust. An experienced estate and trusts attorney should be able to handle this under NY law. Please note that my legal services are available only with a signed engagement agreement in accordance with the Code of Professional Ethics applicable to attorneys licensed in the state of NY. If I can be of any help to you or people you know, give me a call as I would be pleased to provide legal support. Sincerely, Robert Beatson, II; 3-31-2002, 4:55 p.m. EST; Law Offices of Robert Beatson, II; 9818 Glynshire Way, Potomac, MD 20854; Tel/Fax 301-340-2951; email: [email protected]; website: www.beatsonlaw.com; Licensed to practice law in DC, MD, VA, and NY.
Re: Charitable Remainder or remainder which is a charity -- trustee ripping off
The bank trustee is obligated to fulfill the wishes of your father. This can, in fact must, be obtained from the language in the Will.
If a significant purpose of the trust was to provide for "education, support and maintenance" and distributions may be made from principal and income, then it shouldn't make much difference to you how the funds are invested, just so long as there is sufficient to provide for your "education, support and maintenance".
The bank has the right to request information to justify any distribution so that the bank committee and officer can conclude that it is for "education, support and maintenance". The meaning of these words is well established in law and the implementation of the phrase is based on the facts and circumstances in each case. Your living standars as well as your independent means are taken into consideration.
I think you should consult with an experienced estate and trusts laywer for guidance and negotiation with the bank.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
