Legal Question in Wills and Trusts in California
The Trustee of my Family's Trust allowed a life insurance policy to lapse withou
The Trustee of my Family's Trust allowed a $100,000 life insurance policy purchased by my mother prior to her death to lapse by failing to pay the premiums due. Shortly after the Trust passed to me at the designated time (on my 30th birthday, in Feb. 2001) I attempted to get the policy transferred into my name only to find that the policy was no longer active. The insured is a friend of the family and has been diagnosed with a terminal illness (he has had this illness for years) and the insurance company will not reinstate the policy due to his health. Can I take the Trustee to court for allowing the policy to lapse without my authorization?
2 Answers from Attorneys
Re: The Trustee of my Family's Trust allowed a life insurance policy to lapse wi
The provisions of what the (successor) trustee should have done about paying the life insurance policy premiums would be in the Trust. The level of care to be observed when the trustee deals with trust assets would be in the Trust, and in the probate code. An attorney should have an opportunity to look over these documents prior to engaging in a lawsuit. Then there are the economic considerations. The reason all the Catholic priests are being sued (they are also guilty in most instances) is because the Catholic church has money, and is covered in some cases by insurance. If the trustee, that let the policy lapse, isn't covered by insurance, and has no money. You may be eventually getting a judgment against a person that is judgement proof.
Re: The Trustee of my Family's Trust allowed a life insurance policy to lapse wi
That would depend on the trust instrument and whether the trustee had a duty to pay the life insurance--was it held by the trust, or in your mother's name alone? Was the trustee also named as your mother's power of attorney (that would help your case)? Also, if the trustee could argue successfully that it made "prudent" sense from an investment standpoint NOT to pay the premium, the trustee could prevail. See an attorney right away to evaluate the case and make sure you don't miss a statute of limitations period.
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