Legal Question in Wills and Trusts in California

Specific Distribution not distributed in trust

If a specific disribution is supposed to be ditributed into a subtrust, can the successor trustee not distribute the $ amount? My mother made a loan to make a down payment on the house I live in now. At the time of her death, that loan did not have a zero balance, in fact, it was more than the $ amount that is to go in my subtrust. The successor trustee states that since the loan balance for the downpayment on my house is more than the specific distribution stated in the family trust, I am not entitled to it. Please comment.


Asked on 2/01/00, 11:08 pm

1 Answer from Attorneys
Christopher Enge Law Offices of Christopher J. Enge

Re: Specific Distribution not distributed in trust

You have asked a difficult question and the answer depends on a lot of factors. It is common to offset a loan to a trust beneficiary against the beneficiary's gift. One issue would be whether the entire balance became due on your mother's death. Another issue would be whether the terms of the trust said what should happen with the loan. In addition, there may be income or estate tax issues involved. You should contact a lawyer to make sure this transaction is handled correctly and that you do not get in trouble with the IRS.

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Answered on 2/02/00, 5:20 pm


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