A trustee can be the trust creator or someone they have entrusted with the job of managing the trust. But, they are not always the most suitable person for the job. Being a trustee is complicated and requires a very high level of detail and understanding in order to follow the terms of the trust as well as California probate law.
Understanding a trustee’s duties requires specialized knowledge only an expert estate litigation lawyer possesses. Are you wondering if trustees need beneficiary consent to sell trust property? Here’s what to know:
Who Has the Legal Title of Property in a Trust?
To understand the scope of a trustee’s rights and duties, one must first examine who has the legal title of trust assets.
Under California Probate Law, the trustee is the legal titleholder of property and assets held in a trust. Trustees act as fiduciaries and must oversee this property for the benefit of trust beneficiaries.
Still, beneficiaries retain equitable titles as beneficial owners of the property and assets until distribution, after which, the title changes into their name.
What’s a Trustee’s Duty of Loyalty?
Trustees must fulfill a duty of loyalty to the trust. The primary responsibility of a trustee under California Probate Law is to adhere to and execute the trust instrument.
The duty of loyalty is crucial to understanding the extent of their authority. Trustees must comply with the trust and cannot do anything else regardless of beneficiary requests. In the end, this duty can also dictate and limit a trustee’s ability to sell assets.
Trustees have a fiduciary duty to beneficiaries and must account for all actions and transactions of this legal entity. Trustee duties include:
- Preserving the trust property
- Acting in good faith
- Maintaining impartiality between beneficiaries
- Acting in the best interests of the beneficiaries
Essentially, a trustee is a legal liaison between the trust and beneficiaries and supplies beneficiaries with essential information. As a trust’s legal representative, the trustee must manage a trust’s finances, too, which includes:
- Investing assets
- Tracking assets
- Preparing taxes
- Selling property at market value
Does a Trustee Have the Power to Sell Property?
Under California Probate Law, a trustee can sell trust property after the person who created the trust passes because the creator entrusted them with managing assets in good faith. Assets can include:
- Real estate
- Stock portfolios
- Bank accounts
- Digital assets
- And more
Typically, trustees sell property and assets per the creator’s wishes. Moreover, a trustee must often sell assets to fulfill other aspects of their duty of loyalty and fiduciary responsibilities, though they must avoid self-dealing and conflicts of interest.
Still, this depends on the trust instrument itself. If the document stipulates that the trustee must consult beneficiaries before selling property, they must comply. In most cases, however, a trustee does not need permission from trust beneficiaries.
Still, sometimes trustees do not act according to trust instructions or sell assets for their gain, which is when consulting with a premier trust dispute attorney is crucial.
Why Trustees Should Still Seek Beneficiary Approval
Trustees can ordinarily sell assets without beneficiary consent per California Probate Law, but we advise seeking approval and acquiring an agreement.
Transparency and communication with beneficiaries are vital, as are documenting sales and getting agreements in writing. If a trustee can’t get unanimous approval, we recommend submitting a petition to the Probate Court requesting approval.
Following this protocol is essential to avoiding disputes and contests. For example, if a trustee sells a car or house, beneficiaries can complain that they sold it under market value, paid too high of a commission, or otherwise violated their duty.
To further complicate things, beneficiaries can have several years to file disputes. Obtaining everyone’s permission or the court’s approval avoids this. We also advise working with reputable brokers to ensure trustees always sell at the best price.
Contact a Trust Contest Attorney for Premier Representation and Counsel
A trustee has considerable authority, which also means they have significant responsibility. Unfortunately, when administering a trust, these proxies sometimes do not hold up their end of the bargain. Alternatively, sometimes trustees are faced with trust disputes that call into question their motives and commitment to the estate. Whether you think a trustee has violated their duty or are a trustee who needs defense or counsel at any stage of this process, consulting a premier estate litigation attorney who thoroughly understands the ins and outs of California Probate Law is essential.