-- Communicating with beneficiaries on key decisions affecting a loved one’s trust or estate should be uppermost for a trustee, particularly if it involves selling property, probate attorney Bobby Sawyer said this week.
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Property is often the most valued element of a person’s estate, so handling it should be one of the most sensitive areas to approach, said Bobby Sawyer of Johannesmeyer & Sawyer, PLLC.
The attorney revealed that an executor does not require the approval of beneficiaries to sell property in trust or an estate. They explained that this is because a trustee is the legal asset or property titleholder.
The trustee will manage the trust property for the benefit of trust beneficiaries. Beneficiaries will hold equitable titles as the beneficial owners of that property until the property is distributed to them. At that point, the property title will be changed into their names.
Bobby Sawyer emphasized that a trustee, unless subject to written trust conditions, can sell trust property without the permission of the trust’s beneficiaries. The property can be sold to whoever—but as long as it’s sold for a fair market value.
“This can be done as long as the trustee avoids conflicts of interest and self-profiting,” Bobby Sawyer warned.
The sale of property can become a long-running and highly judicial point of complaint by the trust beneficiaries, especially if the property is sold below market value.
“The trustee should be aware of the potential minefields they could encounter if they sell property, even if a trust’s terms state that, without beneficiary knowledge. To be transparent and to avoid legal action, the trustee should communicate openly their decisions”, Sawyer explained.
Bobby Sawyer said other issues arise if the beneficiaries believe the trustee is working to their own agenda and in their own interests, such as selling the property to themselves or a company they own.
“One of the duties of a trustee is to ensure that trust property is productive. So even if they sell the property, they have a duty to reinvest the proceeds to benefit the trust and, by extension, the beneficiaries.”
To guard against beneficiary court action, a trustee is advised to keep documentation of their efforts to sell the property and establish a fair market value.
“This may include seeking extensive opinions on real estate appraisals, business valuation, and opinions. All these efforts and potential values are documented so the trustee can demonstrate their actions to establish the highest possible prices.”
To confirm their decision, a trustee should seek the backing of trust beneficiaries and explain the reason for the sale and the benefits. Every step should be documented in case the matter is challenged in court, Bobby Sawyer said.
The attorney went on to point out that some trustees do fail to uphold their fiduciary duty. If this is suspected, a beneficiary is advised to seek advice from an experienced probate attorney.
Equally, a trustee should seek guidance to ensure that they are taking the correct steps and fulfilling their responsibilities, Bobby Sawyer concluded.
Source: http://RecommendedExperts.biz
Contact Info:
Name: Bobby Sawyer
Email: Send Email
Organization: Johannesmeyer & Sawyer, PLLC
Address: 300 E Lombard St, Baltimore, MD 21202, United States
Phone: (443) 998-8855
Website: https://www.jandspllc.com/
Release ID: 89159097
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