Legal Question in Wills and Trusts in California
Trustee delaying disbursements
My parents died in April and my sister is successor trustee. She hired the attorney who drew up the trust to help her with the distribution.
This attorney suggested posting death notices in newspapers in case there were any outstanding creditors. He said to wait at least 4 months before disbursing money. The notices ran and ended June 20th.
My sister told the rest of us that the money is ''frozen'' until Oct. 20th. Between the CDs and stock there is over $900k. She refuses to pay any out until that date, even though it's been over a month and no creditors have surfaced. A $100k CD matures in late August and I think she should divide at least that up to show goodwill. But, she's dug in her heels that ''legally'' she can't pay a nickel out until Oct.
She has always been a bully and loves holding all the money over our heads. The only thing the trust restricted in paying out was that beneficiaries had to survive the last decedent by 60 days.
Can I do anything? Will complaining to the attorney do any good? Is this grounds for removal of her as trustee?
1 Answer from Attorneys
Re: Trustee delaying disbursements
It sounds like your sister is being very prudent.
No offense, but you've lived this long without your parents' money; a few more months won't hurt.
If this isn't a "taxable" estate (if it's under $2MM and there are no prior gifts), then she should be able to distribute most of the assets after the 4 months expire. But if I were her lawyer, I'd tell her to retain a sizeable amount (at least 10% to 20%) until after the final income tax return is filed next April. I'd also have her check to make sure all of your parents' income tax returns have been filed for the past few years so a tax audit doesn't surface after the money has been disbursed.
This information is not intended to substitute for professional legal advice and does not create an attorney-client relationship. You should accept legal advice only from a licensed legal professional with whom you have an attorney-client relationship.
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