30 Nov 2017

Where, Oh Where, Has My Not So Little Trust Gone?

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Lost the Trust
Once upon a time, an Arizona man with five children created a trust that provided for two of his adult children but explicitly disinherited the other three. Instead, their share was split among eight non-profit organizations. Before his death, he reconciled with his children, amended his trust to include them all and dropped the charities. But, after he died, the amended trust and his will could not be found. The non-profits, with dollar signs in their eyes, argued that he had thrown them out, and therefore the original trust was still in effect and they should get their money. (Keep reading to see how the story ends.)

Now where did I put my Trust?
So what do you do when your trust documents are lost, either intentionally or unintentionally?

And by the way, estate documents sometimes have a habit of walking away when someone dies if someone doesn’t like what they say and gets their hands on them first…..
Unfortunately, people lose trust papers all the time, especially the older documents. The people who set up the original trust are often the only ones to have a copy. The papers get lost when the person moves, closes out a safety deposit box, or forgets where the papers were stored.

A lost trust document is no big deal if the trust was never funded with assets. It is a very big deal, however, if there are bank accounts, real estate or investments that were actually titled into the trust.

How to track down the missing document for a family member
1. Your first step should be to contact the lawyer who helped create the trust. Hopefully the lawyer is still around. He or she might have a copy on file or a copy on his or her computer. If you need to track down the lawyer, a good place to start is the local Bar Association. Or, try calling several local lawyers in the town where the person may have lived for a long time. Ask those contacts to make a few more calls to fellow lawyers to get the ball rolling.

2. Tracking down lost trust papers becomes harder if the lawyer is no longer in the picture. Your next step should be to check with the banks, financial advisors or investment companies. These companies may have a copy of the trust if it was required to fund the trust. Another possibility, though remote, might be a CPA or tax preparer.

3. If that fails, other people may have seen or kept copies of the trust over the years. You should check with the life insurance agent, a favorite charity, a doctor, a family member or a trustee.

4. As a last resort, you might end up in court asking the Judge to decide what the trust might have said. Just because the trust is lost or destroyed, does not mean it was invalidated. Hopefully the contents of the documents can be shown by other evidence such as testimony of people who read it or discussed it.

If you’ve lost your own trust
If you lose your own trust and can’t track down a single copy, you’ll need hire a lawyer to revoke the lost trust. Then you need to create a new trust or a restatement trust to take the place of the old one.

An ounce of prevention
Once your trust is created, make several copies. Keep one at home, perhaps give one to your trustee and place one in a safety deposit box that someone else can access after your death. A digital version should be considered. That way, if you lose the hard copy at home, you’ve got backups out there.

The rest of the story
The court ruled that, just because a trust is missing doesn’t mean it has been revoked, and therefore it is still in effect. The five children had only to prove the contents of the trust. In contrast, the missing will was presumed to be revoked which means dad died intestate and everything gets divided between the children. So it’s a happy ending for the five children who inherit the estate despite the missing will and trust. But where, oh where, can it be?

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