Credit Shelter Trust

[CuriousssOneee]

Jurisdiction

Pennsylvania

Hello, my grandparents set up a trust credit shelter type of will for a very large estate. I believe it was set up to mirror each other's wishes, but I only ever saw my grandfather's will when he passed.

When he passed, I got a copy of only his will. The lawyer who sent it addressed me as contingent beneficiary as the will states if my father pass before me, which he has. My mother was not named in this will.

My own kids are not named so if I die before them, I think this means my shares would pass to my brothers & cousins who are named as contingent beneficiaries?

My grandmother has remarried. Her new husband has a lot of children & grandchildren. Once these wills are made, can the surviving spouse-Grandmother- change the deceased spouses -Grandfather's wishes? Can the living spouse -Grandmother-change their part of the will? Like, can she have her own wishes for her half?

 

[flyingron]

It is impossible to tell without reading the trust documents. The will means nothing to the trust itself. It only applies to assets that remained in the estate at the time of the testator's death. The stuff in the CST would not be included there.

What happens with your share if you die first depends on what are likely a few words in describing the beneficiaries. The lawyer probably could answer these questions for you.

 

[adjusterjack]

my grandparents set up a trust credit shelter type of will

You write that as if it was just one thing. It's not. Is there a trust and a will?

can she have her own wishes for her half?

Yes.

She can do what she wishes with any property and assets that became hers when your grandfather died. Which, I suspect, could very likely be everything.

 

[CuriousssOneee]

Yes, there is will. All beneficiaries and contingent beneficiary names are listed. It states the money is placed in a tax credit shelter trust for Grandmother's benefit. It says the money is to be held by a trustee-my aunt- who will invest it and take only money made from the investment & pay to Grandmother. Grandmother can also use principal money for medical expenses, maintenance & support and she passes whatever is left is to be paid to people she listed.

 

[adjusterjack]

You're going to need a lawyer to read it and interpret it for you.

 

[CuriousssOneee]

You're going to need a lawyer to read it and interpret it for you.

Thank you!

 

[Tax Counsel]

My own kids are not named so if I die before them, I think this means my shares would pass to my brothers & cousins who are named as contingent beneficiaries?

One needs to read the will and the trust it created to know how that would work out.

My grandmother has remarried. Her new husband has a lot of children & grandchildren. Once these wills are made, can the surviving spouse-Grandmother- change the deceased spouses -Grandfather's wishes? Can the living spouse -Grandmother-change their part of the will? Like, can she have her own wishes for her half?

She likely cannot change the trust created out your grandfather's will. However, anything she owns (including anything she got outright from your grandfather in his will) she can give to whomever she wants — she doesn't have to give what she got from him to others he would have wanted to have it. Once it's hers, she can do with it what she wants.

How old was this will of your grandfathers? Today few people need credit shelter trusts because Congress added an election to the estate tax law that allows a surviving spouse to use the deceased spouses unused estate tax credit. As the whole purpose of a credit shelter trust is to preserve the estate tax credit for the first spouse to die while still giving the surviving spouse some benefit of the assets that will pass to others that election makes the credit shelter trust arrangement really unnecessary today.

 

[CuriousssOneee]

TY everyone.

 

[zddoodah]

My own kids are not named so if I die before them, I think this means my shares would pass to my brothers & cousins who are named as contingent beneficiaries?

No one who has not read the relevant documents can intelligently answer any questions about what they mean.

Once these wills are made, can the surviving spouse-Grandmother- change the deceased spouses -Grandfather's wishes?

This question is incredibly vague. Your dead grandfather's will is no longer subject to change. Nor are the wishes of a dead person subject to being changed. Beyond that, we have no possible way of knowing if or the extent to which your grandmother might be able to act in a way that is contrary to your grandfather's wishes.

Can the living spouse -Grandmother-change their part of the will? Like, can she have her own wishes for her half?

Your grandmother may change her will all she wants. We have no way of knowing if or the extent to which she may alter any trust that was created as a result of your grandfather's will.