Have You Seen Grandma’s Trust?

September 10, 2021
Have You Seen Grandma’s Trust

Many grandparents have told us the love they have for their grandchildren is overwhelming. And vice versa. We see it all the time at our office – grandparents have adult children who are financially stable, so they want to leave the inheritance to their grandchildren. The grandchildren are still minors (under 18 years of age in Florida), so what is the best way to leave this inheritance?

If one or more of your grandchildren are still little, you can leave your assets to a TrustA Trust can help you to spell out your wishes in detail. For example, you could specify that you want some of the money withheld until after your grandchildren reach the age of 25 or 30 or when you think they will be able to manage the funds responsibly. A Trustee, usually an adult who is close to you, would manage the distribution of the funds when you die.

If any of the grandchildren have special needs, then a Trust is ESSENTIAL so they do not lose their government benefits when getting their inheritance. This is often accomplished through a Special Needs Trust, which allows funds to be set aside to care for a special-needs child while preserving crucial government benefits like Medicaid or Supplemental Security Income that they currently receive or may receive in the future. These types of Trusts come to life upon the grandparents’ death and are much more effective than simply leaving behind a lump sum of money. The grandparents can decide who will manage these assets by naming one or more successor Trustees to manage the Trust for the benefit of the special needs grandchild.

Yet another scenario has come across our desks more than once – What if Grandma or Grandpa had a Trust but the family can no longer find it, or it simply got lost? Is it gone forever?

Fortunately, the Trust is safe in Florida, which has a procedure for modifying a Trust under certain circumstances – including if the Trust has simply been lost.

The process is set out in the Florida Trust Code, which is Chapter 736.04113 of the Florida Statutes. A Trustee or Qualified Beneficiary can change a Trust if the change does not violate the intent of the Settlor (aka Grantor) (the person who set up the Trust, such as Grandma or Grandpa). They must file a petition with the court stating that at least one of the following conditions applies:

  • The purpose of the Trust has been fulfilled or cannot be carried out; it may be illegal, impractical, wasteful or just impossible to carry out.
  • Unforeseen circumstances would mean that complying with the terms of the Trust would now make it difficult or impossible to accomplish the purpose of the Trust.
  • One of the purposes of the Trust no longer applies or exists.

All three of these conditions could be true of a lost Trust. Without documentation, there is no way of knowing whether the purpose is being correctly carried out or even of knowing what the purpose is. As long as the Settlor’s intent – to provide for their loved ones through a Trust – continues to be honored, the Trustee can ask the court to allow replacement with a new Trust. If the court grants the petition, the Trust will be terminated and a new one activated.

Beneficiaries and heirs are notified at each step in the process, so don’t worry about being caught unaware of changes before they are enacted. Have trust in the Trust!

Putting your assets in Trust is a safe, reliable way of providing for your loved ones, especially young grandchildren. To learn more about this time-honored method of protecting your legacy, contact OC Estate & Elder Law at (954)251-0332 or info@ocestatelawyers.com and get started with a free phone consultation. Our attorneys are fluent in English, Spanish, and Russian.