Minneapolis, MN asked in Estate Planning for Minnesota

Q: A personal care agreement was added to an irrevocable trust under an amendment created by trustee.

agreement states that the caregiver also a beneficiary will be paid for care provided from 2012 to passing of final grantor in 2016.The amendment was drawn up, witnessed, and notorized by trustees attorney. the amount close to 150k was secured by taking a statutory mortgage out on property in trust which was quit deeded to trustee. The trustee and caregiver state these provisions of compensation was made in an oral agreement where only caregiver and trustee were, and grantor were involved. there are 6 beneficiaries and 4 of them were not notified of said agreement. caregiver also moved her entire family children pets and all her bills were paid with accounts in grantors names. Is this legal and possible grounds to contest the amendment and actions of trustee

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1 Lawyer Answer
Scott Maki
Scott Maki
  • Estate Planning Lawyer
  • Moorhead, MN
  • Licensed in Minnesota

A: If the Trust is indeed irrevocable, the GRANTOR typically cannot change/cancel the Trust without the consent of all the Beneficiaries (at a minimum - the Trust documents may not even allow that).

However, after assets are transferred into the irrevocable Trust, the TRUSTEE then assumes control of those assets - but only as directed within the Trust documents themselves. Therefore, any attorney would need to see the actual Trust documents to see if the Trustee was given the "discretion" to make such an agreement with the Caregiver.

Not all attorneys draft a Trust with the exact same language, safeguards and protections. An important aspect of Trusts is that they are flexible - meaning they can be adjusted to account for any situation the Grantor wants addressed (such as ensuring the Trustee has the flexibility, and authority, to make decisions about long-term healthcare if the Grantor no longer can).

Though, if this transaction was overseen by an attorney, the Trust likely did give the Trustee the discretion in making decisions regarding paying for the Grantors care. But you if you have access to the actual Trust documents, you could get myself - or another Minnesota Estate Planning Attorney to review them - that is the ONLY way to know for sure.

And lastly, since I can't be sure what care is being provided - so can't comment on if the amount is appropriate, you can visit this page from the Minnesota Department of Human Services which gives the monthly average of long-term care in Minnesota (2016). https://mn.gov/dhs/ownyourfuture/plan/financial/care-cost.jsp

If you have any more questions, or need further assistance, feel free to check out my Justia profile which has all my contact info. Best of luck.

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