Q: My father remarried after my mom died. His new wife has a trust set up with the investments from her prior husband. She and her 3 children are on this trust. She receives dividends, about 2k a month to live on, which she and my dad use for house expenses, etc. He just has Social Security. If she goes into a rest home (advanced dementia), can this trust help out with these costs so my dad does not have to sell his home? Thank you. --Dede, Sacramento, CA
A: This answer will depend on the terms of the trust that your stepmother's prior husband set up. It is common that distributions may be made out of a trust for the health, support and maintenance of a surviving spouse. Expenses related to a rest home or care facility would qualify for distributions under this standard.
However, some trusts have different provisions and limit the allowable expenses. I recommend speaking with the trustee of your stepmother's trust, as he or she should know whether the trust could pay for her care. The answer lies in the provisions of the trust agreement itself.
If your stepmother is the trustee and is unable to administer the trust anymore, there should be a successor trustee named in the trust agreement who steps in to manage the trust.
However, trust agreements are private documents, and the trustee is not obliged to tell you about your stepmother's trust. Hopefully the trustee has a good relationship with your father and will be willing to discuss the situation with him (or you, if you are authorized to assist your father with his affairs). The goal is to ensure that everyone proceeds in a manner that protects the interests of both your stepmother and your father.
If no one is confident that they understand what your stepmother's trust pays for, I recommend that the current trustee seek advice from an attorney experienced in trust administration matters. He or she can explain what expenses are covered under the trust.
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