My sister and I have been jointly appointed as both Guardian and Trustee of our mom's person and estate. Mom is now in assisted care due to dementia. She is 88 and otherwise in good health. Her assets are in a trust account that she and Dad set up years ago before his death. She not in danger of running out of money anytime soon. We have siblings who could use financial help and are requesting distributions from mom's trust. One of the in-laws, (or perhaps outlaw), has suggested removing her from her "revocable" trust in order to put her on Medicaid, moving her to an AL facility that accepts medicaid in order to greatly reduce her expenses, and distributing the max sum allowed tax-free to each sibling every year from her trust account. His lawyer says the distributions can be legally done. My lawyer says there's a conflict of interest with my sister and I being Mom's guardians, vowing in court to act on her behalf to protect and provide for her, and then using our position as trustees to begin distributing her assets before she's deceased - even before she's sick. Wording in the trust document provides for changes to the account only such as that will benefit the trust beneficiaries: the four siblings AND Mom since she is still alive. This issue seems to be coming dreadfully close to fracturing the family.
Really, on top,of everything else...you and Sis would leave yourselves open to elder abuse too. (Taking advantage of elders financially is elder abuse.....)
I would not go along with it. Moral and ethical aside...there is also criminal issues. Doing what is proposed would be a breach of the fiduciary responsibility...just say no.
I bet your parents were frugal and saved every dime they could, my parents were the same way. I wouldn't even dream of touching any of my parents money for myself while they were still alive.
I cannot believe that one relative wanted to remove Mom from her own trust and have the money distributed before she had even passed. Sorry that won't work with Medicaid and the 5 year financial look back. There might be exceptions as each State has different requirements and programs.
Medicaid would see that money passed to relatives and would brand it as "gifts", thus Medicaid would subtract those $$$ amounts from your Mother's care. Mom would then need to pay out of pocket, but oops, there isn't enough money left for her to do that. Now what? Someone would then need to take Mom to their house and care for her until she was eligible for Medicaid. Depending on how much was removed from the Trust, it could take a few years.
It's terrible and so very common how money can tear a family apart.
Put dear old mum in a cut rate joint to save money so family members can cash in early. I would rather suffer the rath of the "needy" family members. Let em yell. Don't do this.
Second, for the record, your mother cannot be "removed" from the trust. She's not a beneficiary, she's a grantor of assets allocated for and eventually transferred to heirs and beneficiaries named in the pour-over will and trust.
I honestly can't even comprehend the audacity, selfishness and greediness of the in-law who made that suggestion (request?). It literally "blows my mind!"
Fourth, even if annual payouts are provided for in the Trust, ALL the conditions must be met before these payouts can be made and payouts must be made in strict accordance with those Trust terms.
Fifth, as Trustee, you would be in flagrant violation and abuse of your mother's intents and wishes, and of the Trust. Those are grounds for legal action by the heirs/beneficiaries. While I don't have as much insight into guardianship, I would think it's grounds for breach of your duties in that position. The judge who appointed you would have grounds to remove you from your position.
Sixth, not having read the Trust, I still question advice of the attorney who said it can be legally done, but the real issue is exactly how those allocations are addressed in the Trust and on what the distribution depends (i.e., are they annual distributions during her lifetime or only after her death?)
Seventh, if the family is fractured, that's unfortunate, but your obligation is to your mother now and the beneficiaries later (unless the trust specifically provides for annual payouts during your mother's lifetime).
As the member of a family who DID have sibs "dip into" the proverbial pot long before dad or mother had passed---it caused some anger and pain. They "inherited early" $100,000 (brother) and $60,000 (sister). Dad has now passed and while mother is in relatively good health and remains in another brother's home---I know that the remaining sibs will inherit about $10,000 a piece, if even that. (My POA brother shared that with my, so I would be able to process the "anger" long before the reality hit.)
I'm not angry, I am sad a disappointed in my mooching sibs who took advantage of my parents for years before dad died. I expect nothing to come from Mother's estate. Kids shouldn't.
When Grandma was in a NH and actively dying, mother asked me to help her begin the sorting process and cleaning of her condo. This was in accordance with Grandma's choice. She knew she was dying and had specific requests we were carrying out. It still felt "too soon" and we were uncomfortable doing it, but we could double check with Grandma about what she wanted. (She was 96 and not able to ever have returned to live independently). Mom used her own funds and was reimbursed by the estate after the funeral.
Get a lawyer involved. And good luck!!
BTW, Medicaid won't pay for most assisted living facilities. It is there for people in nursing facilities when they run out of resources. People need to protect Medicaid money so it is there for people who really need it.
It's a tough job you have. Your mom and dad trusted you and sister to follow their wishes. Dr Phil has a line, "I wouldn't expect you to substitute your judgement for mine" and then there is a BUT. In your case, "but my attorney advises me otherwise". Then don't say anything else except provide an address for the food bank etc. I don't mean to be insensitive to your siblings situation just help them shift their focus from what they perceive as the answer. Good luck.
I firmly believe that all $$$ earned by an elder belongs to that elder & any overage is a bonus - fortunately I have been able to increase mom's net worth so that she is worth slightly more than what she was when I took over her affairs - that means about 40 to 60 hours a month of my time - but that also means her generated income takes care of her - maybe you should make sure you are getting good advice to make her income=her care costs - if you don't come close then DON'T TOUCH A PENNY OF HER MONEY OTHER THAN HER CARE - otherwise just take a screwdriver & put it in either ear & turn it because that's what you will be doing to yourself later on
If your siblings decide to split from you because you are not willing to do what they want, so be it. I wouldn't want to be associated with family members that are that greedy, selfish & uncaring. The money belongs to YOUR MOTHER, not her children----and your siblings financial issues are likely due to their poor choices & living above their means.
IF YOUR SIS WANTS MONEY THEN LET HER EARN IT - she has some gaul to even ask & then after the lawyer's email to give you trouble over it ... you now know where she come from & reject any advice she gives from now on -
As P.O.A. I ask for input but basically It is MY voice only that counts - if you are not grossely enriching yourself [given number of hours put in you can never come out to positive] but doing what is ethical then you are doing a great thing for your mom & SCREW THOSE WHO WANT $$$$ NOW NOT WHEN/IF THEY DESERVE IT