Tuesday, June 23, 2009

skipping legal advice with a trust and living to regret it

Here's a case to ponder.

An elderly lady is in a nursing home. We'll call her Sally. Sally deeded her real estate into a Trust. She also gave a Power of Attorney to her granddaughter, we'll call her Polly.

Polly listed the real estate for sale and signed the sales agreement using the POA.

I examined title, including the trust document and found no authority for using the POA. Instead what I found was that Sally was the trustee unless we got a certification from a doctor that she was physically or mentally incapacitated. [We have that letter.] If so, then Suzy, Sally's daughter and Polly's aunt would be the successor trustee. The trust went on to say that if Suzy died or was declared mentally incompetent by a court, then Polly would be the successor trustee.

So, Suzy is our decision maker and deed signatory, not Polly.

Polly was not happy. Polly wants us to talk with an attorney because she doesn't understand trusts.

I called Suzy. Suzy lives pretty far away. She has been trying to manage her mother's affairs, keeping Polly in the loop and trying to do it as a family. Suzy had no idea that her mother's real estate had been deeded into a trust. Turns out that Polly and her dad - without using an attorney - found a trust form and filled in the blanks and had Sally sign it. They did the same thing with a Quit Claim deed.

So, NOW Polly is seeking legal counsel to try to undo what she has already done and that's putting Suzy in complete control of the real estate and the trust.

Interesting. I don't think Polly or her dad even read the trust document before they had Sally sign it. That's a big DUH, huh?

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