Family Trust Business Problems ???
Q: Before my dad died, he set up our family business and real estate in a family trust and a spousal trust. My stepmother and I are the two trustees, and upon her death, the business and real estate become mine. She is the actual executrix of the will. We are a small business with no board of directors and no stocks have ever been given out. It took three years and the pressure of a very persistent lawyer to get the business and building out of the estate and have the trusts funded. In those three years, my stepmother increased her salary and let the business spiral down into the red. After I finally became a trustee last year, I managed to bring the business back into the black and am struggling to keep it there. My stepmother gets a large rent, as stipulated by the will, and has also increased her salary significantly. She has no real input into the business, does no real work and does not bring any money into the business. I, and my other employees, are struggling to keep the business afloat, and she is continuing to drain it. If this continues, and I believe it is her wish, there will be no business left for me to inherit. She is 82 and already has enough money accumulated to live out her life in ease. I have attempted, along with our accountant, to try to get her to reduce her salary to no avail. Do I have any legal rights to over- ride her without actually getting involved with attorneys I can't afford? There was an arbitrator, our previous accountant, set up in the will. However, he seems hesitant to get involved and it would also be costly to the business. I am the fourth generation of our family business and am doing everything I can to save it. Please pass on any advice you may feel is relevant.
A: No. Every possible way to "over-ride" her will require the help of at least one attorney. So if you really cannot afford an attorney, it is a completely academic exercise to learn about your rights. In that situation I wouldn't bother to read the trusts, or give us the exact language, or clarify the relationship between the business and the real property, or clarify what legal form the business entity is in, until you find some source of funds to pay an attorney. But that doesn't leave you without options. Your best option doesn't involve over-riding anyone. You have the right to: (a) resign from all posts and positions, including trustee, employee, everything, (b) leave without taking anything with you that is an asset of the company, meaning don't take a customer list or even a contact list of any kind, (c) leave without informing any company employees or customers of your departure until it is over, (d) start a new business which will be in competition