How Do We Change the Way the Assets of a Trust are Divided?

Full question:

Our father's will stipulated that funds from a trust account were to be dispersed 50/50 to my brother and myself when the beneficiary is deceased. If my brother or myself are deceased before the trust beneficiary the entire proceeds go to the surviving heir. We have mutually agreed to sharing the proceeds 50/50 even if one of us dies before the other so that our heirs can inherit our share if we are deceased. I need a form to reflect this, or can it just be put in letter form signed mutually.

  • Category: Trusts
  • Date:
  • State: Washington

Answer:

The answer will depend in part on whether the will or trust agreement defines the ratio of ownership. The trust document could be amended or the will could specify per stirpes distribution. A living trust may be changed according to the terms of the trust document. In order to make changes to a living trust, a person may sign a Trust Amendment or sign a complete Trust Restatement. A trust amendment changes specific provisions of a living trust but leaves all of the other provisions unchanged, while an amendment and restatement of Trust completely replaces and supercedes all of the provisions of the original living trust.

Per stirpes is a Latin term meaning "by roots," or by representation. The term is often used in wills and trusts to describe how to carry out a distribution when a beneficiary dies before the person whose estate is being divided. Under per stirpes distribution, children take among them the share which their parent would have taken had he survived the decedent. The children stand in a representative capacity to their parents. Another way to express the same intention is to provide "…to her children, by right of representation, share and share alike," which is clear to the non-lawyer. If there is no provision for distribution to children of a predeceased child, then the gift may become part of the residue (what is left after specific gifts), and then the grandchildren may not share if there are surviving children of the giver.

Under per stirpes distribution, when the beneficiary dies before the person whose estate is being divided, children of the beneficiary take among them the share which their parent would have taken had he survived the decedent. The children stand in a representative capacity to their parents.

If per stripes isn't specified, then the other choice will divide the bequest equally among the surviving heirs and children of a deceased heir will not receive the share the deceased heir's share.

For further discussion, please see:

http://wills.about.com/od/overviewoftrusts/a/trustamendment.htm

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Trust funds are typically distributed according to the terms outlined in the trust document. If a beneficiary dies before the trust is administered, the distribution may depend on whether the trust specifies per stirpes or another method. Per stirpes allows the deceased beneficiary's children to inherit their parent's share. If no such provision exists, the remaining assets usually go to the surviving beneficiaries.