As A Trust Administrator Can I Sell Property That Is In A Trust?

As A Trust Administrator Can I Sell Property That Is In A Trust?

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As a Trust administrator, whether or not you can sell property that is in the Trust all depends upon the role of the Trustee and what powers are granted to the Trustee. In every Trust document there are generally three parties. Those parties include a Grantor or Grantors, who are the person or persons who created the Trust, and the Trustee. It’s possible to have more than one Trustee, and they can operate independently, simultaneously, or by majority. The third party to the Trust is the Beneficiary. A Beneficiary is one or more persons or charities that are to benefit from the Trust.

When the Grantors create the Trust, they define the terms of the Trust and the powers of the Trustee. In most standard garden variety Trusts where an individual is placing assets into a Trust and they want those assets to be protected for the next generation, there is often a core property which is the homestead that the couple or individual is living in. There might be some investment properties or a summer home or something of that nature.

With regard to the homestead, sometimes the Grantors don’t want to move, and if they do want to move, then they are going to make a decision in the future. The powers that they are going to give to their Trustee include a limitation that the Trustee doesn’t have the power to sell the house without the Grantors’ direction, and the Grantors maintain what’s known as the equivalent of a life estate. They have a right to remain in the house for the remainder of their lives. Also, the Grantors can retain the power to direct the Trustee to sell the house and to buy a different one, so in case they want to move, let’s say, from New York to Florida, they could have the Trustee sell the house in New York and purchase a house in Florida.

The Grantors retain the right to sell their house and to buy a new house in place of it. Of course, they direct the Trustee to make those transactions, but sometimes there are additional properties and the couple has grown older and they don’t really want to manage those properties any longer. They might have owned a few rental properties, so they’ll give their Trustees the power to basically do whatever they need to do. They can buy and sell new rental properties, they can sell properties and invest them in the market or whatever it is they think would be valuable. This is because they are the ones who are ultimately going to be the beneficiaries in the future when their parents pass away. It lets them manage their property now and do as they will. A Trustee can sell the properties in a Trust only if the grantor says that they can. If the Grantors want to retain rights to their home or their summer home or even maintain income coming in from rental properties, they cannot give the powers to those Trustees so that the Trustees do not have the power to do that during their lifetime.

The other part is the administration of the Trust after the Grantors have passed away. After the Grantors have passed away, the Trust can either be defined that it maintains the properties in the Trust for some period of time, which could last their entire lifetime, or it could define that the Trust property is to be distributed upon the Grantors’ death.

If it’s distributed upon the Grantors’ death, the Trust document will direct how the property is to be distributed. For example, the house would just be retitled in the name of the children, one house would be retitled in the name of one child and another house would be retitled in the name of the other child, or one house would go to a charity. Or, they might want the properties to be liquidated and the monies distributed. That’s all going to be defined by the Grantors at the time that they create the Trust. They are going to determine what the powers of the Trustee will be after they die.

At my firm, I spend a fair amount of time talking with the Grantors about what exactly they would like to happen during their lifetime and what they would like to see happen after they pass away. Then I craft a Trust which gives those specific powers that are particularly carved to the Grantors’ desires during their lifetime and after death. This helps them realize the exact goals they’d like to achieve.

For more information on Trustee Selling A Trust Property in Long Island, Nassau County and Suffolk County, a FREE phone consultation is your next best step. Get the information and legal answers you are seeking by calling (516) 806-0762 today.

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