Fictional Scenario: Our client who we prepared an estate plan for had just passed away. She had named her oldest daughter as the sole successor Trustee and divvied up her remaining assets among all four of her adult children. Three of her four children had given her grandchildren. The youngest daughter decided that she and her husband were happy with their nieces and nephews and did not want children of their own. Our client’s logic was that, because her youngest daughter did not have the expense of children, she did not need as much money as her siblings and left her daughter only a fraction of the money that she left the other three children.
Reading her mother’s Trust, the oldest daughter was infuriated. How could her mother short one of her own children?! She was adamant that all four siblings receive equal shares, and wanted to ignore the conditions her mother had outlined in the Trust.
Can Trustees and Personal Representatives Ignore the Terms of a Trust or Will?
This scenario is extremely common among both Personal Representatives (regarding Wills) and Trustees (regarding Trusts). Many people are taken aback by their loved one’s last wishes, don’t agree with the conditions, and want to change them. This is completely understandable as, sometimes, the other beneficiaries can take their emotions out on the Trustee or Personal Representative, straining relationships among the survivors. Other times, the survivors are in agreement that the Will or Trust no longer represents what the Decedent wanted based on conversations with the Decedent, but the Decedent may have passed suddenly without having the opportunity to amend their Will or Trust.
Regardless of whether the dispositive provisions in a last Will or Trust are selected out of spite or just someone’s own personal logic, these are someone’s last wishes and they must be respected as they are legal and binding. Not to mention that, if the terms and conditions of a will or trust are not followed, the successor Trustee or Personal Representative may be held responsible for committing a breach of duty and can be sued by the other beneficiaries. So, in short, no – you cannot ignore the terms of a Trust or Will. But that also doesn’t mean that you are completely out of options.
What Are My Options?
Let’s go back to the opening scenario. Suppose all four siblings agreed that the conditions in their mother’s Trust were unfair and came to an agreement about how to resolve the issue. According to Michigan’s probate code, if all beneficiaries agree and come to a consensus on how to resolve whatever the issue is, they can agree amongst themselves to modify the shares that each of them is to receive.
However, if any beneficiary that is affected by the proposed change is not in agreement with the proposed modifications to the distribution scheme, they cannot be forced to accept the modification. Sometimes, this prevents the modification from happening at all, while other times, the modification can occur with respect to the beneficiaries that are in agreement, leaving any disputing beneficiary’s share unchanged from the terms as outlined in the Will or Trust. Sometimes, such a modification should have court approval.
Even if an agreement to modify shares cannot be done for one reason or another, you are still not completely powerless. Remember that once a beneficiary receives his or her inheritance, it is their money to spend as they wish. If one or more beneficiaries do not want to lessen his or her inheritance in order to give a share to someone else, then you (and other willing beneficiaries) may still make a personal gift to the shorted beneficiary. The distributions would still be distributed according to the terms and conditions outlined in the Will or Trust, at which time you would be free to spend it, or in this case, gift it, to whomever you choose.
Do You Foresee Yourself in this Position?
While you can always try to persuade someone to see things your way, we also know that this doesn’t always work. If all else fails and you don’t want to be put in such a position, there is one more option. You can resign as Personal Representative or Trustee, or simply refuse to act as such if you haven’t already been appointed.
We Can Help!
If you think you might want to try to modify the dis-positive provisions of a loved one’s Will or Trust after they are gone, or you just want to better understand your responsibilities and powers as Trustee or Personal Representative, we can help! Please don’t hesitate to contact one of our experienced probate attorneys for a free consultation. We can guide you to and through the best plan of action for your situation.
Info@TheProbatePro.com l 248.399.3300