Legal Question in Wills and Trusts in Ohio
Private Stock in Living Trust
Our father left private company stock in our brothers' names with the stipulation that our mother receive all dividends or that all dividends be divided equally among four children if she chose to forgo them. Our brothers kept all dividends to themselves for several years until their action was discovered and our mother asked to see an attorney. After that, our brothers began to share the dividends, although no records or receipts have been shared despite being requested. Recently, we discovered that our brothers sold half of the stock without informing anyone. We asked them about it and they said the stock is in their names and they can do whatever they wish with it, and that our father intended it for them. We know that it was not our father's intention for them to sell the stock. He wanted them to have it so they could vote it and have job security (all three worked at the same company, and our brothers still do, although it is not a family business). Was it legal for them to sell the stock when that action removes the dividends from our mother or from us? The trust says nothing about compensation for dividends in the event of sale, it says the dividends themselves are to be shared.
1 Answer from Attorneys
Re: Private Stock in Living Trust
A trust is treated very much like a contract. If all of what you write is spelled out in the trust, then there could be a breach of contract on the part of your brothers. If the sharing was intended but not explicitly expressed by your father and ownership was transferred to your brothers, then the sharing became a moral obligation and not a legal obligation.
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