Legal Question in Wills and Trusts in California

Re: generation skipping trust

This is a complicated question, dealing with two different types of taxes (estate taxs and generation skipping transfer tax), and dealing with issues that are internal to the trust.

The tax issues depend on the size of the trusts assets, as well as a couple of other factors. There are exemptions to both Estate Taxes and GST (Generation Skipping Transfer Tax). If the overall estate is below 2 million, and your mother did not use her Lifetime Credit to make gifts during life, then most likely you will not deal with estate taxes. GST is another issue, exemptions to GST rules are specific and manipulating an existing trust immediately after your death could open you to problems with the IRS, including GST. The main issue hinges on whether what you are doing would be interpreted by the IRS as part of a gifting plan of your Mothers. It is too complicated and involves to many issues to answer over this forum.

Two other issues are inside of this question as well. 1) whether disclaiming (not quitclaiming) your interest in the trust will be sufficient to destroy the trust and cause it to pay out. 2) Whether you can make a valid and enforceable side arrangment with your son for consideration in exchange for your disclaiming your interest.

The answer to the first question, is that it depends. It depends on the specific wording of the trust. Once again this is not a simple question and would require an attorney to review the actual trust to give you a solid answer. Most likely, and this is a guess not a legal opinion, the answer is no. Usually remainder interests in California trusts (what it sounds like your son has) only pay on the occurance of a triggering event (most likely your death). If it is tied to your life, then disclaiming your interest in the trust will most likely only cause you to lose your right to the trust disbursements, not cause the trust to dissolve. This, again, depends on the terms of the trust and can only be answered by an attorney who reviews the trust.

As to whether you can make an enforceable side arrangement? The answer to this is most likely no, but once again the trust would need to be read to give you a valid answer.

Long story short, you have a complicated issue that can only be answered by someone reviewing the trust document, the trust estate, and your entire situation. Be very cautious of anybody who gives you a yes or no answer to this question. You need to hire an attorney to review the document completely.

One final thing, you might look into whether the attorney who is trustee also drafted the trust documents for your Mother. Such acts might raise grounds for monetary recovery.

Re: generation skipping trust

Probably not. But, it will depend upon the trust document itself. You are entitled to get a copy. You should then take it to a lawyer who can answer your questions and advise you.