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Trustee coerces elder to disclaim trust benefits, becomes sole beneficiary

My husband and I fear that his elderly mother ("mother") may have been coerced by the trustee of her deceased brother's irrevocable trust into signing a Disclaimer of Benefits. We are certain that the trustee (another son) had her sign something in the presence of his attorney the day her brother died (and before his siblings arrived to town). Mother explained to me that she does not know what she signed. She is very hard of hearing and could not hear/understand what was being said to or asked of her, she is not knowledgeable re: trusts and fiduciary issues and felt overwhelmed, she was very upset by the recent death of her only sibling, and she trusted her son (the trustee) to do right by her. In her telling, she was enormously grief-stricken and "just wanted to go home," so she signed as they asked. In the following weeks, the trustee informed all parties that he was the sole heir to the estate. Currently, all assets are going to him, and the financial gain had improved his standard of living dramatically (new homes, vintage cars, vacations, etc.).

We are not sure that mother was a beneficiary to the trust, since the exec/trust has refused to provide copies of any trust documents (even the schedule of beneficiaries) and vehemently denies that anyone other than himself was named in the will or trust. Based on the history of her brother's estate planning and their communication combined with the fact that her signature was needed/wanted on something, we suspect that she was the sole beneficiary to the trust. She, however, does not know what she signed. The trustee took her copy before leaving his lawyer's office and has blocked her efforts to obtain a replacement. We cannot think of another reason her signature would be needed and would precipitate her "lock-out" except to waive her benefits. Also, before she signed, the attorney asked if she wanted to keep any funds for herself, suggesting that she was a beneficiary and was transferring her benefits to the trustee. The trustee and his wife responded to this question before mother could, assuring their attorney that they would take care of her and she would not need her own money. (She was living with them at the time in a house provided by her deceased brother.)

Being removed from the trust and the trustee's subsequent actions have caused her great financial and emotional injury. After signing the papers, mother continued to live with the trustee. He and his wife subjected her to a campaign of surveillance, isolation, and intimidation (seemingly) to prevent her from communicating with anyone about the trust and the document she signed. They also charged her exorbitant rent and spent excessively/wastefully on items for which she was expected provide reimbursement, which they withdrew directly from a joint account. (When she moved in with them in 2008, she had >$200k from the sale of her home.) Once her personal funds were exhausted, she was "allowed" to move to another state.

In 1994-1995, the deceased brother executed a pour-over will, a Nominee Trust, and a Living Trust. He asked our mother to select executor/trustee to be named in the will; she chose her only offspring still residing in Mass. She was named as an alternate. The funds in the trust included mother's inheritance from her parents, which her brother had managed with his own since their mother's death in 1993. Mother wanted/expected these funds to be her "legacy" to her children and grandchildren. Trust benefits also would provide a good standard of living for her through her "sunset" years and support her increasing care needs.

Our questions are ...

Can a disclaimer of benefits be revoked if it was obtained through coersion, misinformation, or other violations of fiduciary duties by the trustee (who received substantial financial benefit? [Note that the exec/trust also had Power of Attorney for her.] The lawyer who set up the trust for her brother (who now represents the trustee) has repeatedly told her (and us) that it's all a "done deal" and cannot be reversed.

How can we obtain the schedule of beneficiaries to the trust (which would put this whole thing to bed if it confirmed the exec/trust statements) and/or a copy of the documents our mother signed (Disclaimer of Benefits)?

Who has standing to file a complaint and seek remedy for our mother? Does my husband have standing as a relative? If not, as her heir or as someone who expected inheritance from his deceased uncle? Our mother likely will not pursue recourse. She is understandably resistant to bringing legal action against her son and holds on to her hope that he will "come around." She is also increasingly affected by dementia. Her daughter, with whom she now resides, has Power of Attorney. She also does not want to pursue legal action. She takes the exec/trust at his word that he is the sole heir, and she does not want to risk forgoing the small annual stipend that the exec/trust has promised to voluntarily provide to her (for a 6-yr period).

What statutes of limitations apply to the range of potential wrong-doing by the trustee? When do the clocks start?

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Submitted Tue, 07/08/2014 - 15:11

There appears to be evidence of wrong doing and/or abuse of powers by the Trustee; but establishing these material facts is not an easy thing to do.

You may want to start by seeking a Declaratory Judgment from the court declaring your mother had diminished capacity at the time she signed away her rights. A judgment of this sort can be used in any action in the Probate court to hold the trustee accountable and to seek to replace them and in a claim for restitution. A primary way to challenge the changes made to the beneficiaries' rights under the Trust is to establish that there was undue influence exerted upon the beneficiary. With a Declaratory Judgment this issue is more easily adjudicated.

The Declaratory Judgment (which can be brought in the Probate or Superior Court)is the first step in a two step process; thereafter you still have to bring the action against the Trustee(s) in the probate court.

Please discuss this situation in detail with an experience estate's attorney who can advise you on the best way to resolve this matter and assist you in the complex litigation that will follow.

I hope you found this helpful
Estela Matta, Esq.

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