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
- Automobiles
- 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.
Fortunately, at Gokal Law Group, we boast the experience and expertise to provide unrivaled representation for trustees and beneficiaries. Contact us for a consultation.
If you have a brother or sister, you know it can be hard to get siblings to agree about anything, let alone what to do with inherited property. Following the loss of a loved one, complex emotions are at play that can cloud your judgment or alter your outlook. You may decide inheriting a property like a house that needs work isn’t worth the headache, while your sibling may be motivated by their sentimental attachment to hold onto it. In these situations, it can feel like taking siblings to court is inevitable.
Does the “Majority Rule” Apply When Selling Inherited Property?
In California, “majority rule” is not the end-all-be-all when it comes to selling an inherited property. When multiple people own property, any owner can file a partition action to divest from property that cannot be divided.
A partition action involves taking siblings to court to force a sale of property and divide the profits among siblings per a testamentary instrument. A forced sale can even occur when the majority of siblings want to maintain ownership of the property.
Can You Force the Sale of Inherited Property by Taking Siblings to Court?
In California, a co-owner of an inherited property can force a sale of that property by taking legal action against siblings with a lawsuit called a partition action, a legal proceeding that can result in the court ordering the sale of the property and the division of the profits among siblings.
Under California Code of Civil Procedure 872.210, a co-owner can file a partition action against any co-owner when they disagree about whether or not they want to sell the property and the property cannot be divided. To file a partition, the following conditions must be met:
- A disagreement exists between owners about whether to sell a property
- The property cannot be divided (e.g. a home or car that cannot be split in half)
Once one sibling files a partition, it is very difficult to stop the sale. The most common alternative to taking siblings to court with this lawsuit is reaching a settlement agreement that allows the siblings who want to keep the property to buy out the one who doesn’t.
In other words, the fact that a partition has been filed does not mean there is no way to avoid a forced sale if the siblings contesting a trust can come to terms. For example, imagine a house is worth $300,000, and there are three siblings, each owning a third.
If one sibling wants to keep the house, that sibling could offer to pay each of the others $100,000 for a total of $200,000 to own the property, effectively buying them out. However, this gets more complicated if there is still a mortgage on the house.
“Whenever there are siblings in a trust dispute, it is important to remember that an attorney is essential even if you want to avoid litigation. AA lawyer can help with the sale of inherited property split between siblings they cannot divide, negotiate the sale of one co-owner’s share. Too often, the emotions that surface in these situations and deep-rooted sibling rivalries result in legal action against siblings. A lawyer can help you and your siblings agree on the home’s value or arrange an appraisal. Just as importantly, if taking siblings to court is unavoidable, then a premier lawyer is an invaluable ally.” - Harry Wallace, Trust Litigation Attorney in Orange County, Gokal Law Group
Another common resolution occurs when a sibling agrees to pay the other sibling to rent out the property.
Premier Trust Litigation Lawyers in Orange County
When taking siblings to court, more than capital or material gain is at stake - family ties are on the line, too. These situations are when you need each other the most. Working with a premier attorney is of the utmost importance to help negotiate a settlement and preserve your relationship so you can heal from losing a loved one. Still, if trust litigation in Orange County is unavoidable, a lawyer will also be essential to advocating for your interests.
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
- Automobiles
- 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.