Legal Question in Wills and Trusts in California
Heirs of Estates legal rights
My husband and his one sibling were once set up in trustee-co-trustee insurance trust. My mother in law got upset about a family matter and said she feared divorce between my husband & I. To protect my husband she felt it necessary to remove his name on the paper work as co-trustee. It was a make shift form they invented with the life ins. agent that put together the trust. My question is this....is my husband at risk of loosing his 50% share in the estate? My mother-in-law insists she didn't make that decision everything is still the same with just his name removed. What rights do we have if any if indeed my husband has been written out of her estate? Can you just take someones name off an estate, but they still have the inheritence? Please Help!! Her insurance trust she is paying a hefty premium every year to off set probate or inheritence taxation.
3 Answers from Attorneys
Re: Heirs of Estates legal rights
Neither you nor your husband have the right to a single dime. If his mother want to cut you both out, that is her absolute right. She doesnt have to leave anything to anyone.
Re: Heirs of Estates legal rights
Being a trustee of a trustee has nothing to do with inheriting property under the trust. A person can be removed as trustee and still inherit if the trust document says he is an heir, and vice versa.
Usually if a life insurance trust is set up to pay estate taxes it is an irrevocable trust and the identities of the beneficiaries cannot be changed without severe negative tax consequences.
In any event, the mother in law is free to name her heirs and neither you nor your husband can change that.
Re: Heirs of Estates legal rights
Your mother-in-law has absolute rights to give her money to anyone she wishes.
That said, life insurance trusts are usually irrevocable, so it would be difficult to change the beneficiaries. The trust may allow her to change trustees, but if so, it must be done carefully to avoid adverse tax consequences.
A trustee is different than a beneficiary--the trustees' job is to manage the trust and make distributions to the beneficiaries. Thus, if your husband was removed as a trustee only, he apparently still is a beneficiary.
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