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Trusting

New Mexico Trust - Heritage Trust

From the, "You Can't Make This Stuff Up," File

Once there was a trustee responsible for two trusts, only it turned out there was a third trust with more trustees, and then later, lo and behold, a fourth trust, with, yes, another trustee to boot. 

Which begs the question: How much Trust can a Trustee Trust if a Trustee could Trust Trust?

(When the Trustee is Heritage Trust, the answer is: a lot).

Here’s what happened: a local attorney asked Heritage Trust to step in as successor trustee for a woman managing two trusts created by her parents.

When Heritage Trust met with her we learned there was in a fact a third trust managed by a corporate trustee in Santa Fe.

The beneficiaries of that third trust—a combination of daughters and grandchildren—were frustrated with the corporate trustee who failed to explain, report or demonstrate transparency to them.

Through the course of our due diligence we learned the grantors had also established a fourth trust dedicated to one particular estranged family member—but only to be distributed upon his 60th birthday, as well as a family corporation whose shares were owned by two of the trusts, which also owned two properties.  

Heritage Trust took the job, on one condition: We manage all four trusts in order to effectively manage distributions and untangle the mangey knot of trusts, properties, and family dynamics. 

Everyone obliged-especially the prior trustees who were more than glad to let us take over- and we went to work identifying and recording the assets, which included a defunct restaurant; six lots—that included three commercial rental properties; a family home; a rental home; and a building that had been destroyed by a burst pipe several years prior, which would require the consent of the City Council to demolish as it was of a unique design style dating back to the 1920s.

Straight away we determined that the rental home was unsafe and deemed it uninhabitable—which meant relocating a person confined to a wheelchair who had lived there for over twenty years!

And those six commercial lots? Well, turns out they were a superfund site, created by a now defunct dry cleaning business. Of course we quickly established communications with the Federal government, who would need to approve all action related to the site.

Next we set out to develop a simple distribution plan that took into account previous distributions made by the prior corporate trustee; was acceptable to and understood by  everyone in the family; and allowed for distributions to be made to beneficiaries over several years and as properties were sold. 

We leaned into our accounting firm roots to turn the extraordinary challenges into a clean numbers game, but we still had a lot of business and family relations to attend to.

Here’s the quick and dirty on how the rest of this situation unfolded:

  • The rental house was evacuated, demolished and the property sold to a national retail chain

  • The vacant land was distributed in lieu of cash to a beneficiary using a value that everyone accepted

  • The City Council consented to the demolition of the 1920s building

  • The restaurant was sold to an up-and-coming commercial business

  • The family corporation was peacefully dissolved

  • The six properties deemed a superfund site were sold, with consent of the Federal government, to one of the family members

  • And final distributions were made from three of the trusts and they were terminated

Respectfully Heritage Trust continues to act as trustee for the fourth trust and we just love this story--it truly demonstrates how we excel at dealing with messy and daunting situations others run from.

You just can’t make this stuff up.