I filed a disclaimer in NJ that I thought would accelerate trust distributions which will be mandatory after my death. The trustee's lawyer ...

Question

I filed a disclaimer in NJ that I thought would accelerate trust distributions which will be mandatory after my death. The trustee's lawyer spoke to me and tried to convince me to drop the matter. He explained why he believes the trustee is likely to win. I told him how I would respond, and he replied that while the judge might accept my approach and rule in favor of the beneficiaries, the case could drag out for years at the expense of the trust. Traveling for all the court appearances would be impractical for me and the beneficiaries because we live abroad. This threat is designed to prevent the beneficiaries from presenting what I believe is a very good case. As far as I can see, this is a straightforward technical question that should be ruled on in a non-adversarial way. Is there any way I can make an inexpensive motion and request a binding ruling on whether the disclaimer will trigger the trust distributions that are supposed to happen after my death. Can the person discliaming or a beneficiary file a "Complaint for Advice and Direction", or only the trustee could do it? Would this kind of motion or something similar prevent a long drawn out legal battle?

Answer

This answer honestly would require an attorney to review the trust and your disclaimer. It is possible that you are in the right. It would also be helpful to know what the trust's attorney told you.

You should consider asking for the trustee's response in writing.

Kevin A. Pollock, J.D., LL.M.

www.PollockAtLaw.com

P: (609) 818-1555

Licensed to practice law in Florida, New Jersey, New York and Pennsylvania.

Also, visit my blog at: http://WillsTrustsEstates.blogspot.com/

Answer

It's impossible to really answer the question without more facts and a complete review of the documents involved.

That said, assuming an executed disclaimer is valid under state law, I'm not sure what would be up for debate. The person making the disclaimer is deemed to have predeceased the decedent and the document is then read in that light...If there was a trust created for your benefit, with the remainder passing to your children upon your death, then your intervening life interest would be terminated by the disclaimer, and the trust interest would pass to the remaindermen. Unless I'm missing some important fact, I don't see what would be up for debate or interpretation.

Answer

I agree that more facts need to be provided, as a valid and timely disclaimer should have resolved the issue. A disclaimer, in itself, might not accelerate the distribution, if the trust agreement contained language deferring a distribution. For example, presume the trust provided that upon your death, your share would go to your children and the document also provided that a distributee must attain a certain age to receive a distribution. By disclaiming your interest, your share would go to your children, but if they are not yet at the age of distribution the would not receive anything until they were of the distribution age, even if you were older and could get the distribution now if you had not disclaimed. Many trusts have multiple ages for periodic distributions, but allow a distribution to be made earlier in the discretion of the trustee. What does the agreement provide? If you can get me a copy, I would be happy to review it at no charge.