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94yo MIL called me last week and shared details of how her trust is set up. (FIL passed 5 years ago.) My husband (let's call him Fred Sr) is their only son and our son (Fred Jr) is her only grandchild. There is no other surviving family. Apparently their trust leaves the entire estate to Fred Jr with the caveat that he has to wait until he's 50 to receive any of it. He is now 21. The executor is a combination of Wells Fargo Bank and Fred Sr. Once Fred Sr passes, then it will be only Wells Fargo bank alone. Never mind that I think this is kind of crazy and weird (my parents just left the estate to me and my siblings, evenly split)... does anyone know how much a bank like Wells Fargo can bleed an estate dry through "administrative" fees? We're talking potentially 25 years worth of fees and also whatever they will pay themselves to administer the sale of the house! My in-laws worked so hard for their money and I just don't understand this.

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Send, that's brilliant!  I never even thought of defunding the trust.

Worried, it might be possible but someone will have to read the trust to see if there are restrictions on transferring assets out.  And that comes back to the fact that Mom won't allow anyone to read it.  Issues:  whether WF and Fred Sr. will be joint trustees with equal rights, or if one has jurisdiction over one aspect the other over a different aspect (such as assets).  

Powers given also factor in significantly. 

Somehow or another, you have to get access to read the Trust.   By any chance do you know the firm or attorney who prepared it?   In my experience, good firms may either give the original Trust to the Settlor, and make conformed copies for the Trustee, or some clients want both the original and conformed or just copies.
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Sendhelp Nov 2021
Thanks GA.
Experience can be a good teacher.
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Worried, with NO disrespect to the expert opinions you are getting here from ITRR AND GA, you might consider logging on to www.Bogleheads.org and asking this question there. Lots of financial and legal expertise to be had.
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What can be done with paper can be undone with more paperwork.
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Defund the trust, while Mil is alive. imo.
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Worried4385 Nov 2021
I think this might be possible for her portion (the "Survivor's Trust") if her paranoia doesn't make her hostile to this advice from me. It's so sad that after all these years of not trusting anyone, it turns out that she put all her trust in a lawyer and an institution that will charge administration fees for 25 years. I've never heard of anyone having to wait until they are 50 to receive the money that their family wanted to leave them.

Do you this is possible for the portion that went into lockdown when FIL died?
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I think I might use the huge error in judgement that FIL made in trying to avoid those non-existent "inheritance taxes" as a reason that Fred Sr. needs to look over the trust documents, to make sure that his mom's money is protected from high WF fees as well as clearing up what happens when MIL passes.

It sounds like WF used FIL's fear of taxes to their own advantage.
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Worried; my thinking is that she is already suffering from some loss of cognitive skills (paranoia is often a symptom).

Perhaps Fred could say something like "mom, would it be okay if the lawyer explains this to ne, because I'm not sure I understand and want to make sure that I protect your interests"?

I wonder if what she is telling you actually lines up with what the lawyers and bankers are telling her.
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Worried4385 Nov 2021
Yes I've been wondering how reliable a witness she is. And the fact that she's paranoid means there's no one there to help explain or watch out for bad actors. I wish she was not such a difficult person to protect.

I called a local legal firm, one that my own mother used in changing her trust, and asked for an appointment for my MIL. They told me they could not give me an appt as they had worked with her in the past and sent her a letter of disengagement! And that they were certain I could find someone else who could help her! I said, "Oh my, I know she can be very determined when she wants something." and the secretary replied, "She was asking us to do something that was not possible." So there's something going on here that I don't understand. I wish she would let me look over the trust documents myself, it would solve so many of these problems.
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W/o going into details, I would NEVER involve Wells Fargo into any financial aspect whatever.    NEVER!

Search on "Wells Fargo financial issues" and you'll get several hits on WF's financial problems as well as management issues.  

https://www.google.com/search?hl=en&source=hp&biw=&bih=&q=Wells+Fargo+financial+issues&iflsig=ALs-wAMAAAAAYX7zNBOWwYAnok0ZCEMQtpNO5eY9q0OD&gbv=2&oq=Wells+Fargo+financial+issues&gs_l=heirloom-hp.3..0i22i30l3j0i390l3.1110.9152.0.9244.28.28.0.0.0.0.216.3684.4j22j2.28.0....0...1.1.34.heirloom-hp..1.27.3510.V7veb45HtT0

Just one line of one article provides an inkling of its problems:

"Wells Fargo has gone from one of America's strongest big banks to easily the weakest.

For years, Wells Fargo's laundry list of scandals and legal problems had only a fleeting impact on its once-monstrous bottom line. That is no longer the case...."

https://www.cnn.com/2020/07/15/investing/wells-fargo-bank-dividend/index.html


I don't have precise recollection of every trust I might have worked on at estate planning firms, but I do think that 50 is an odd and extended age for inheritance.   There might be special considerations, such as inability to manage money, but that doesn't necessary change as someone ages.

Did your MIL provide any insights into her desire to change the age restriction?   Actually, she might be more intuitive than we realize.   OTOH, she may realize that WF could actually bleed through the trust during that interim period.

W/o prying or inferring, does Fred Jr. have a problem managing money?  If so, I could understand this restriction.  If not, it makes no sense to me, other than to exclude your husband from trust funds and/or to provide a piggy bank for WF.  

Was the Trust executed before or during the periods when WF began having financial problems? 

I would expect WF to "bleed" through the trust corpus, and perhaps then some.  Do some background research on the legal problems Wells Fargo has experienced and consider if along with your existing question whether it's advisable to consider an amendment to the Trust to select a more reliable Trustee.

Just for clarification and not to be critical, the individual who created the Trust is a Settlor; after his or her death, the Successor Trustee manages the Trust.   The term "Executor" doesn't apply to Trusts, other than if there's a Pourover Will and someone is identified as such (but it's my understanding that legislation years ago changed Executor and Executrix to Personal Representatives, at least in MI).  here are distinct differences, however between a Trustee and an Executor.   I'm sure this is "clear as mud"!

I also can't help telling you that the setup of this trust stinks.   To me it's an opportunity for Wells Fargo to take control and pad its coffers.    "Bleed through" is a good expression.

If you do have the Trust reviewed by an attorney, go to a well known, large law firm with an estate planning department where you'll find specialists not only in estate planning, but successor planning, wills and pourover wills, probate litigation, special needs trusts, and other similar practice areas.
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Worried4385 Oct 2021
Fred Jr has no history of mismanaging money as he is just a college student. He is a very very good student and stays on his budget that I give him. He likes his part-time job in a lab on campus doing real science. (When he was in elementary school, he was one of those kids who would leave the toy store upset, still with his gift card in his hand, as he couldn't bring himself to spend the money!)

I think the age 50 limit was from my FIL who certainly would have wanted Fred Jr to have to work hard at surviving before he got any money. FIL was sort of a jerk, to be honest.

Thank you so much for your reply. I want to reply to your other points more carefully as I am on my phone right now so I will return when I get a bit more time.
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"As I understood it, when FIL died, 50% of the estate was put into lockdown under the terms of the trust at that time. She is living off of her 50% now. She can only change the terms on her portion of the estate. But now I'm confused because her lawyer told her a few weeks ago that she can't change anything, not even on her portion."

This to  me is unthinkable.   If Fred Jr. is co-trustee with WF, I wonder how much, if any, control he has over changing the terms of the Trust.  

This whole situation just raises my suspicions.
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High tax rate of inheritance? How big an estate?

There is no federal estate tax until you reach an estate of 11.2 million dollars (last I checked). Does your state have very high inheritance taxes?
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Worried4385 Nov 2021
Our state has no estate tax. Does anyone know if their estate falls under the "couples" or "singles" $ amount now that FIL has passed? Seems so complicated!
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Barb, good insights on the potential inheritance tax issues.   I think people may worry about them even though they're not familiar with the monetary threshold.  I'm guessing that might have been how WF got it's foot in the door.   Perhaps they had an account there and someone saw a possibility.
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