A trust is a legal entity in which assets (such as bank accounts, real property, stock accounts) are placed in the name of the trust. A trustee (or more than one trustee) oversees the trust. The trust has named beneficiaries who inherit assets in accordance with the provisions of the trust.
The general purpose of the trust is to avoid the cost and time of a probate. The trustee is authorized by the trust to gather the assets, reduce them to cash if so directed, pay off the liabilities and distribute the cash as set forth in the trust. The trust has authorized the trustee to act so there is no need for court supervision. This avoids lengthy delays in getting court approval.
Successor Trustee Real Property Sale
Successor trustee real property sales occur when the person who set up the trust (original trustee or settlor) has either passed away or has resigned as trustee and the property is being sold by the successor trustee. A successor trustee is named in the trust and is often a relative such as a child or a sibling. It can also be an outside third party such as a bank trustee or a professional private fiduciary.
The successor trustee has a fiduciary duty to act in the best interests of the trust and the beneficiaries named in the trust. A significant difference between a sale by the original trustee and a sale by the successor trustee is that the successor usually has not lived in the house within the last year and has limited or no knowledge of the condition of the property. By law, the successor trustee’s disclosure requirements are limited to known material facts.
We listed a property in which a professional private fiduciary was named the successor trustee. The beneficiary was the son of the original trustee. The beneficiary had lived in the property prior to his mother passing away. The trust required that the house be sold. The son had to move out of the house and take his things.. He left a large quantity of personal property that he did not want. The fiduciary had to remove and dispose of the items. The house was in poor condition. The fiduciary had to secure the home and prepare it for sale. The fiduciary could only note the visible issues as she did not have any other knowledge of the home.
The home was marketed and we negotiated a sales contract. The buyer did inspections so that he felt that he knew the property condition. The buyer was satisfied with the property and the sale was closed.