Does your Trust owe money to your estate?
We have a number of estate matters at the moment where the executors have been surprised to find that the financial statements of a trust or trusts controlled by the deceased state that the deceased is owed money by the trust either for –
moneys lent to the trust by the deceased; or
unpaid present entitlements.
Unpaid present entitlements come about when the trustee decides to distribute income (or capital) of the trust to a beneficiary but no funds are, in fact, paid to the beneficiary.
These amounts are assets of the estate and it is part of executors’ duties to collect these funds.
This can cause considerable problems for executors –
where there is a claim on or contest about the estate from a spouse, child or other dependant who has not been provided for in the Will or who believes the provision in the Will is inadequate; and
the trust does not have liquid assets to pay the amounts or the trust does not have sufficient assets to pay the amounts.
So, when you receive your annual financial statements for any of your trusts, you should check carefully for entries which show amounts the trust owes and also for unpaid present entitlements.
Then you should consider and discuss with your professional advisers how these amounts might affect the administration of your estate. It may require a change in your Will or Binding Death Benefit Nomination or a change to the way you hold assets.
Our expert succession team can help you with advice about these and other estate administration issues. Give us a call on (07) 5441-1400 or fill in our contact form.
This article is general in nature and does not constitute legal advice. If you require legal advice in relation to your personal circumstances, you must formally engage our firm, or another firm to provide legal advice in relation to your matter. Bradley & Bray lawyers takes no responsibility for any use of the information provided in this article.
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