Q: My mom is elderly, my brother offered to have her live with his family. They decided to purchase a home together.
My problem is that the house they purchased is going to be used to sustain my sister-in-laws Home Health Care business. The whole process was kept secret from the 3 other siblings until after the purchase was completed. We also discovered that my sister-in-law had purchased a second Home Health Care Business and that too will run out of the Home my mother purchased with my brother. The property purchased was $700,000. my Mom gave my brother $300,000 from the sale of her townhouse. There is a trust fund set up for the 4 siblings, I would like to have the money my brother and wife received to purchase their new home and place of business to be deducted from his share of the trust. How do I go about doing this.
A:
The first question is: Was the $300K a gift and if so did your mother file a gift tax return. If the answer is it is not a gift, then the second question is: Who owns the property and how is the property titled?
The easiest way to deal with this is for the Trust to change the terms of the distribution. Assuming the remainder of the trust is a four way equal split, the Trust would provide that the net trust assets would be calculated as follows: Trust Net Assets plus $300,000 are divided by 4, 3 siblings would get the full amount computed, then your brother would get the same amount less $300K. Example: Trust Assets at time of your mother's death $1.2 Million.
The Distribution amounts would be for you and your two other siblings $1.5 Million/4 or $375,000, your brother gets $75K.
A: Your question ("How do I go about doing this") is not a valid question, because you do not have the authority to change your mother's trust. She would have to be the one doing something, and if you're pushing her, it could get undone under the law of undue influence. She needs to hire an elder law attorney, and meet alone with the attorney, to go over what happened, whether it was what she wanted to do, and what steps can be taken to rectify the situation.
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