Legal Question in Wills and Trusts in California

My grandparents put all of their assets into a trust for their five children and seven grandchildren. The trust isn't huge in value (includes three homes, some stocks, and some bank accounts). The way the trust is set up (as I understand it) The home my aunt lives in currently becomes hers after my grandmother passes (my grandfather already has), the home my uncle lives in becomes his, and the home my grandmother lives is gets divided among the other three siblings. Stocks and accounts get divided to the grandchildren.

My aunt has convinced my grandmother to take a loan out against the big house and put the money in both of their's names. My aunt has used a good chunk of the money to pay for things like getting her husband some major dental work done, buying her daughter a car, and paying of a large amount of DUI fines. I'm concerned on a personal level that not only will the money be drained from the trust by the time my grandmother passes, but that the debt racked up will be to the sum that it will not have been paid off.

If the lien is against the big house, do only the people named to inherit that house then incur that debt? Is there any way to stop my aunt (through my grandmother) from draining the trust further? My aunt is admittedly involved in some illegal activities, will this put the rest of the family at risk if she uses trust money to fund it?


Asked on 7/26/10, 8:57 am

2 Answers from Attorneys

You are correct to be very concerned. The debt on the "big house" will have to be paid off out of the estate, diminishing the distribution to everyone who is entitled to a share of the house. You are also right to be very concerned about her activities with the money. Although not nearly as big a problem as if she had been investing proceeds from criminal activity in trust property, there are forefeiture laws that the government might try to use to get at the trust assets once your grandmother dies, and even if you beat them it would be a long and costly fight.

Quite frankly it sounds like your grandmother is a victim of elder financial abuse, to add to your aunt's crimes. Without a lot more information, I can't say for sure, but it has that feel to it. The Placer Co. District Attorney has general information on elder financial abuse here: http://www.placer.ca.gov/Departments/DA/DAUnits/Elder01.aspx There's a phone number there for more information. If they tell you it sounds like a purely civil matter, get back to me and I'll see what I can do to help you find local counsel.

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Answered on 7/26/10, 12:13 pm
Jonathan Reich De Castro, West, Chodorow, Glickfeld & Nass, Inc.

I agree with Mr. McCormik, it seems like your grandmother is being taken advantage of. Depending on what the rest of the facts are, and if it was appropriate, you could also consider seeking a conservatorship for your grandmother.

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Answered on 7/26/10, 1:41 pm


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