Legal Question in Wills and Trusts in Wisconsin
My mother signed over the trustee duties to my sister last summer. Shortly after we moved mom to an assisted living residence and sold her home. As trustee, my sister invested the home sale proceeds with a life insurance company but she failed to establish beneficiaries. After our mother passed away last fall, my sister began the process of closing the trust and distributing the assets as instructed, but was informed that this investment would need to go to probate and that the courts would follow a will that had been written several years before the trust. In the will they had listed our brothers children instead of our brother due to personal reasons but they later changed that decision and identified him as a benefactor in the trust. My question is will the courts use the old will or more recent trust document or could my sister as the trustee ask the courts to correct her error of omission so that my brother receives what our parents had intended to be given him?
1 Answer from Attorneys
Either outcome is possible, depending upon who was the beneficiary of the investment account in question. Like any other asset, such an account would not necessarily even be an asset within the trust unless someone took the time to transfer it there earlier. If the desire was for the trust to control, the beneficiary of the investment account would generally have to have been the trust itself. Otherwise, an older beneficiary designation set up by your mother, perhaps before she created the trust, might still control. Of course this is only a guess, since you have not supplied the reason why the investment custodian decided that they wanted to take a different course; there could be at least a dozen different possible reasons for this decision. An alternate route to probate might be an action to affirm the trust, which would serve the same purpose and is specifically allowed under WI law. The first one to file suit will usually be the one who determines the course of this litigation. If no case is timely filed, the custodian will normally follow its own interpretation. My answer here does not make me your lawyer, so you need to consult one of your own before acting upon this. For further discussions, you may contact my office at 333 Main St, Racine, WI 53403, 262-633-3090, during business hours, or see me on the web at www.jayknixonlaw.com. See over 15 years of my previous answers to consumer questions at http://www.lawguru.com/answers/atty_profile/view_attorney_profile/jknixon. Attorney answers may contain advertising materials.
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