A trust holds more than funds and assets; it holds your family’s legacy. As a result, a trustee has considerable influence over the story of this legacy, and their actions ripple across generations. When trustees sell property, it is normal to feel uncomfortable or outright wronged. Many beneficiaries wonder, If property is in a trust, can it be sold? And we are here to break down the answer for you.
At Gokal Law Group, we have helped beneficiaries just like you receive the justice they deserve when a trustee sells trust property they do not have the right to, for their gain, or in a way that harms the trust. Read our blog to learn more.
If Property Is in a Trust, Can It Be Sold in California?
Trustees can sell property held in a trust, but it depends on the trust terms. The trustee is responsible for distributing assets to beneficiaries per the trust document. Once property is transferred out of the trust and into the hands of a beneficiary, it is theirs to sell.
Still, trustees typically reserve the power to sell trust property themselves. One situation they might sell is when multiple children inherit a single piece of property.
Trustees are also responsible for paying debts and taxes for the trust before they can distribute assets, and they can use trust funds to finance trust administration, which can involve hiring professional help and paying themselves.
If there are not enough funds in a trust to finance these expenses, they can sell trust property to raise funds, but they must sell it at market value. A trustee cannot sell trust property to themselves or for their gain.
These situations constitute a breach of duty and warrant trust litigation. It is also important to understand that if the property is in a trust, they are allowed to sell it per their duty to make the trust profitable and invest assets like a “prudent investor” would.
However, trustees must always deposit the proceeds into the trust account after a sale. They are not allowed to deposit profits into personal accounts. There is no simple answer to the question, If property is in a trust, can it be sold?
The trust instrument itself may also broaden the scope of a trustee’s power and authorize them to sell trust property, which is why working with a trust litigation lawyer is crucial to determine what the scope of their power is.
“Sometimes, a trustee may sell property they have the authority to and still violate their duty. For example, if they sell a house held in the trust that is valued at $150,000 for $100,000 or even $125,000, this is still a violation of duty, and grounds to pursue litigation, recover losses, and even replace the trustee. We have worked with countless beneficiaries in situations like this and compiled expert witness testimonials to prove their case in court.”
– Andrew Micaraset, Associate, Gokal Law Group
Related Article: California Probate Law: Selling Property Without Beneficiary Consent
Has a Trustee Sold Property They Didn’t Have the Authority to? Schedule a Consultation to Protect Your Inheritance!
So, if property is in a trust, can it be sold? Yes, generally speaking, property held in a trust can be sold, but there are limits and requirements surrounding the sale of trust property that trustees must adhere to protect beneficiaries. If you feel a trustee has sold trust property below market value, wrongfully sold it to themselves or for their gain, or failed to make prudent decisions to keep the trust profitable, visit our Contact Page to schedule a consultation and protect your inheritance!
Disclaimer:
The information provided on this website does not, and is not intended to, constitute legal advice. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client relationship between the reader, user, or browser and Gokal Law Group, Inc. All information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information.
Readers of this website should contact an attorney to obtain advice with respect to any particular legal matter. No reader, user, or browser of this site should act or refrain from acting on the basis of information on this site without first seeking legal advice from counsel in the relevant jurisdiction. Only your individual attorney can provide assurances that the information contained herein – and your interpretation of it – is applicable or appropriate to your particular situation.