This will effectively cut me and my siblings out of any part of my father\u2019s estate. Everything, including their home was supposed to go into the trust, and when both my father and stepmother ended up passing, the home was supposed to be sold and all proceeds split evenly between all of their beneficiaries, including my siblings and me. Is there anything we can do to assure my father\u2019s wishes are granted?\u00a0<\/p>\n
Daughter\/Stepdaughter<\/p>\n
Related:<\/strong> My estate is worth millions of dollars. How do I stop my daughters\u2019 husbands from getting their hands on it?<\/a><\/p>\n <\/p>\n It is stories such as this that give all the wonderful stepmothers out there a bad rap.<\/p>\n There are a few possibilities here: 1) Your father set up a revocable trust by accident and did not properly understand the difference between the two trusts; 2) he set up a joint trust where only his portion of the assets became irrevocable upon his death; or 3) he at some point changed his mind and set up a revocable trust, and left his assets for his second wife to distribute to his respective heirs. Even if #1 occurred, it would be up to you to prove this in a court of law, with the help of an attorney, in the event you contested the terms of this trust. Keep in mind, there are many variables that go into creating a trust, so it highly depends on the terms laid out.\u00a0<\/p>\n But many obstacles lie ahead. The burden of proof lies on your doorstep, and you should be cognizant of the statute of limitations in your state. \u201cTrust contests must be brought within a certain period following the grantor\u2019s death,\u201d says Brian Liberis, senior estate planner at EP Wealth Advisors, based in Boston, Mass. \u201cSo if a court action is necessary, it should be undertaken as soon as possible. In addition, you would likely have the burden to prove that the trust did not reflect your father\u2019s intentions and that a mistake was indeed made.\u201d<\/p>\n \u201cHowever, some revocable trusts are drafted so that they continue to be revocable until the death of the second<\/em> spouse,\u201d Liberis told MarketWatch. \u201cIf that were the case here, then your stepmother would likely have the authority to change the entire trust and redirect the assets to her children. If that is how this trust was drafted, then your only recourse would be to contest the trust in court, on the grounds that it should be modified\/reformed due to a \u2018mistake.\u2019 That is, the trust as drafted did not reflect your father\u2019s intentions.\u201d<\/p>\n Obtain a copy of the trust, so your attorney can review the terms, and see if there was any evidence that it was poorly constructed and\/or if only a share of the assets are revocable. \u201cYou would be asking the court to modify\/reform the trust on principles of \u2018equity,\u2019 or fairness,\u201d Liberis adds. \u201cIf, at the time it was executed, it was intended that, upon the death of the second spouse, the property passed 50\/50 to the children of each spouse, then principles of fairness would dictate that the trust be reformed to ensure that result \u2014 or, at least, so you would argue.\u201d<\/p>\n Your stepmother appears to be intent on ensuring the assets in the revocable trust \u2014 or the part of the trust that is revocable \u2014 will be inherited by her son. That may be an expensive lesson for you and your father; the surviving spouse will not always adhere to their late partner\u2019s wishes. Whether it\u2019s a large or a small amount of money, the second wife or husband can come to believe that they deserve or are entitled to their late partner\u2019s entire estate. We could argue about the ethics of cutting you out of the picture, but your focus should be her legal entitlement.<\/p>\n If you are successful in your endeavors, be aware that assets deposited in a revocable trust typically receive a step-up in basis, so any capital gains are effectively wiped out. That would, of course, benefit your stepmother. So if he left a $1 million home that was originally purchased for $500,000, any capital gains would be calculated on the home\u2019s value at the time of your father\u2019s death, thus saving her money if she sold it. However, assets in an irrevocable trust may not receive a step-up in basis if they were not included in your father\u2019s taxable estate.\u00a0<\/p>\n If men were more likely to outlive their wives \u2014 women tend to outlive men by about six years<\/a>, a gap that could narrow or widen depending on the age gap between a couple \u2014 step children would be writing more letters about their stepfather. In this column, letters about stepmother\u2019s emptying bank accounts<\/a> are more prevalent than stepfather\u2019s doing the same thing. But children are also likely to disagree with their father\u2019s wishes, if they believe he has been too generous<\/a> to his second wife. In the meantime, I wish you a painless resolution to your trust debacle.<\/p>\n You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com, and follow Quentin Fottrell on X, the platform formerly known as\u00a0<\/em><\/strong>Twitter.<\/em><\/strong><\/a>\u00a0<\/p>\n The Moneyist regrets he cannot reply to questions individually.<\/em><\/strong><\/p>\n Previous columns by Quentin Fottrell:<\/strong><\/p>\n \u2018I grew up pretty poor\u2019: I got an annual bonus. After I pay off my credit cards, I\u2019ll have $10,000. What should I do with it?<\/a><\/p>\n \u2018I received an insurance-claim check for $22,000\u2019: Why on earth does it take five days for my check to clear?<\/a><\/p>\n\n <\/div>
\u201cMany obstacles lie ahead. The burden of proof lies on your doorstep, and you should be cognizant of the statute of limitations in your state.\u201d<\/h4>\n
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\n <\/figcaption><\/figure>\n<\/p><\/div>\nDear Daughter,<\/h2>\n
Principles of fairness<\/strong><\/h2>\n