Legal Question in Wills and Trusts in California

stock split in a trust

My father and step mother created a trust and my father has died. If my father designated a gift in the trust of a specified number of shares which incidentally was ALL of the shares he owned of a particular company, what happens if the stock splits and no change is made to the number of shares designated in the trust as a gift. Essentially what has happened is that the value of my gift was cut in half because a stock split has resulted in the split off stock being sent to a bypass trust. My brother has also seen his inheritance reduced by 50% by this same issue. If ALL of my father's shares were originally designated to us for a gift, how can we lose 50% of it's value because of a stock split? It just doesn--name removed--seem to be within the spirit of the law and the intent of my father. Of course, my step mother is now claiming, after the attorney called her, that my father intended it that way. I am certain that he didn't--name removed--

Are we just out of luck since our father did not change the total number of shares after the stock splt?

This trust is in California.

Thanks for any help...


Asked on 11/08/08, 3:50 am

2 Answers from Attorneys
Phillip Lemmons, Esq. Phillip Lemmons APC, Attorneys at Law

Re: stock split in a trust

That's actually a good question. I believe the court will ultimately give you all the shares. There is a simple solution. You can file a petition for instructions with the court. Do good legal research to support your position. Perhaps your brother should join in. My firm can handle that for you, provided the trust is being administered in southern California.

Call when you're ready to go forward.

Phillip C. Lemmons, Esq.

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Answered on 11/08/08, 2:32 pm
Todd Stevenson Stevenson Law Office

Re: stock split in a trust

You are not out of luck, but you will need an attorney experienced in trusts, estates (and perhaps litigation in this case) to represent you and your brother.

Trusts, if properly funded, can be handled outside of Court. However, in this case it sounds like you will need to hire an attorney and bring the matter under the jurisdiction of the probate court.

Please give me a call if you want to discuss further.

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Answered on 11/08/08, 3:38 pm


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