[WSBAPT] Trustee obligations

[Lenard]

A nearly hypothetical situation:  PC, unrelated to grantor, is trustee of
grantor's trust.  Grantor lives alone, is very fragile (possibly no longer
competent), and doctor has said 24 hr care is necessary.  Son stepped in to
help grantor, hired about a dozen caregivers to provide care 24/7, and asked
trustee to transfer money to grantor's bank account where son has signature
authority so son can pay caregivers.  PC (trustee) prefers to let son handle
logistics and son prefers to oversee dad's care.  Some bills come to
trustee, some bills are being paid by son from grantor's personal account
after transfer of trust funds.  This has been going on for about a year.
There is another child who says she agrees with what son is doing.  Both
kids are contingent remaindermen of the trust.  Trust is typical grantor
trust to take care of grantor for life then remainder to children.

 

And purely hypothetical questions:  Does PC have an obligation as trustee to
report to IRS because trust money is being used to pay for domestic help?
Or is it grantor's sole responsibility because trust money ran through
grantor's account?  Any other issues for trustee?  Is it okay to delegate
management of care to grantor's child including payment of expenses?  PC is
wondering about possible personal liability.

 

Lenard L. Wittlake, PLLC

Attorney & Counselor at Law

 

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