‘This has been going on for too long’: The bank paid $18,000 in fees itself. My late father’s trust was not distributed. What do I request?
My dad’s dad set up a trust at a large bank with my dad and the bank’s trust department as co-trustors. My father passed away late last year; After his death, the trust was supposed to be divided equally among the remaining six (my father’s children from two marriages).
It is now November and the trust has not been delivered yet. The bank paid me $18,000 in fees. I have contacted them several times over the last 10 months via email and phone, and they give countless reasons why the disbursement has not happened yet.
It is clear that the bank does not benefit from speeding this process up because they are charging a small amount in monthly fees. Also, they transferred the money to my father’s bank account 10 days after his death and there seems to be no attempt made to get it back.
How long will it take to dissolve a trust managed by a large bank? What are their fiduciary duties and what do the rest have to recourse to to hold the bank accountable? This has been going on for too long, and I’m running out of time to tie up. Any advice?
That’s a lot of fees and, as you say, the bank has plenty of reasons to take advantage of its sweet time. But distributing trusts can also be a complicated and lengthy procedure. The beneficiaries are clearly in the midst of efforts, perhaps understandably waiting for their own piece of the pie.
Talk to the bank, trust manager and/or their manager, and ask them the questions you asked me. Why is it taking so long? Tax filings can delay the process for months. Can they give you an estimate of how long it will take? You have every right to timely and accurate information.
Why hasn’t the money transferred to your dad’s account been recovered yet? The bank seems to have taken its eyes off the ball. You can completely remind the trustee that they have a fiduciary duty to the beneficiaries, and you can petition the court to remove them as trustee.
Doug Sherry, president of Arden Trust Company with offices in seven US states, including California and Florida, sympathizes with your predicament, but also points out that a reasonable amount of time for a type of trust can be unreasonable or lengthy. for other types.
“The type of assets held in the trust is a direct factor in the length of time until a distribution can be made, especially when you have a lot of people left,” he said. “Special properties, such as real estate, must be valued and may be sold prior to distribution.”
“Some assets, such as a tightly held limited partnership interest, may require interest to be provided first to other partners before the interest is transferred to the rest of the party,” said Sherry. added.
Sherry says there’s another wrench on the job that could delay the distribution of assets. “Disagreements among beneficiaries over the allocation of assets to certain shares or whether assets should be sold can also add time to the distribution process.”
While there may be good reasons for administration to take longer than you might wish, the trustee must contact you and the rest of the beneficiaries throughout the process. You will receive a final accounting and an estimated time frame for the delivery to take place.
Similar, David Handlera partner in trusts and real estate in Kirkland & Ellis, with offices in the United States and abroad, indicates the time required to complete a trust depending on the type of trust. For example, an irrevocable trust can sometimes take longer than a revocable trust.
You may not be fully aware of the nature of this trust. “The fact that his father was a co-trustee suggests that this can be a revocable trust,” Handler told me. “If so, the administration of the estate needs to be coordinated with the trust, which can hold most or all of the father’s assets.”
“If it’s an irrevocable trust and the assets are not part of the father’s estate for tax purposes, the disbursement should be fairly quick,” he added. “But even then, there may be illiquid assets that are difficult to transfer or may be in liquidation.”
Delays are not always for nefarious reasons, but you should be informed of the progress that is being made. This is a good time to establish regular communication with the trustee and hopefully you can then avoid an even more time-consuming lawsuit later.
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