Getting out of living trust

[thor117]

My father and his new wife signed a living trust leaving the completely paid for house they lived in to be split between me, my brother and her two children equally. When he died in 1998 the trust became irrevocable. My question is could she take out loans and give the money to her children so that when she died the proceeds from the sale of the house would given to creditors. Or maybe find some other creative way to prevent us from getting anything or is the trust a guarantee that no matter what we (4 children) are each 25% owners of the house no matter what?

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[army judge]

My father and his new wife signed a living trust leaving the completely paid for house they lived in to be split between me, my brother and her two children equally. When he died in 1998 the trust became irrevocable. My question is could she take out loans and give the money to her children so that when she died the proceeds from the sale of the house would given to creditors. Or maybe find some other creative way to prevent us from getting anything or is the trust a guarantee that no matter what we (4 children) are each 25% owners of the house no matter what?

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Without reading the trust, I'd have no way to know.
Don't post it here, take it to an attorney and ask him or her your questions.
As your dad predeceased his wife, I'm not sure the trust would ever have been enforceable.
A better way for dad and his wife to have addressed the issue would have been to give themselves life estates.
That said, perhaps they did just that and all is as you expected.
Anyway, pay a lawyer $500-700 for an hour or so of their time.
Ask them to draft a legal opinion providing you the enlightenment you seek.

 

[thor117]

He told me he was protecting me. He was smart and had it drawn up by his attorney. What happened was he was investing a large sum upgrading the house and wanted to make sure she could no screw him or us out of his interest in the property since the property was paid for and in her name. The trustee's are him and her. Now that he's dead no changes can be made because it clearly states him AND her. She wanted to sell the house in 2000 but she can't unless we sign a quit claim form. As of now the 5 of us own the house. (her and the 4 children) I'm really just wondering if creditors can stake claim on a trust when she dies. Maybe they are limited to her 20% interest. I dont know but I do know I'm not paying 5 to 7 hundred for an opinion. That's all it really is until a judge rules. This should be a simple question for a person who does estates, trusts and wills.
Thanks to anyone who can help.

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[Betty3]

I don't think anyone here can give you any kind of definite answer - we can't read the trust.

You might want to read this link: http://www.americanbar.org/content/...ctical/books/wills/chapter_5.authcheckdam.pdf

In the link it notes: An irrevocable trust doesn't avoid taxes entirely--it merely sets up a separate taxable entity
that might be able to pay taxes at a lower rate than if all the assets were combined in one estate. *It can
also offer a bit more protection from creditors.*
If you make the trust irrevocable to reduce taxes and avoid creditors, prepare for a lot of
paperwork. And understand that you lose the flexibility of a revocable living trust. Be sure to consult a
lawyer before setting up an irrevocable trust.

It is going to depend on how the trust is exactly worded regarding protection from creditors & how it is worded re anything else you might want to know. It's up to you whether to pay a lawyer to review the trust & answer any questions you might have.

 

[thor117]

My question has nothing to do with taxes.

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[Betty3]

I know. It was part of the paragraph that contained the creditor info so I posted the whole paragraph as it was.