Transactions or Sales Involving Trust Property
In setting up a trust, the grantor assumes it will be used for its intended purpose, including utilizing its assets for suitable transactions and sales. Trustees are expected and required to engage in proper protocols to ensure the trust provides accordingly for its beneficiaries. However, trustees are also prohibited from acting in their own self-interest in performing their duties, making some sales and transactions involving trust property prohibited or suspect. The Nashville estate planning lawyers at Martin Heller Potempa & Sheppard PLLC can help in all aspects of trust administration, from construction to any necessary contest actions. We represent grantors as well as beneficiaries in ensuring that a trust is operating properly and in accordance with the law.Duties Governing Transactions or Sales Involving Trust Property
Trusts are designed so that assets may be managed under a name other than the individual who acts as the grantor. When establishing a revocable trust, the grantor appoints a trustee to oversee the assets and their use, whether it be him or herself or another individual. However, the grantor still maintains the right to make necessary changes to the trust. These trusts allow a grantor to have access to the property contained within them throughout his or her lifetime, and they may also act as a distribution method for named beneficiaries upon a grantor’s death. Establishing an irrevocable trust permanently transfers all ownership interests in the assets to the trust, and changes by the grantor are not permitted.
An irrevocable living trust appoints a trustee other than the original grantor, who has control over the trust’s property. The trustee of a living trust may enter into contracts with third parties if the trust instrument expressly grants that power, or if such contracts are reasonably necessary to execute the purpose of the trust. As a result, there may be an implied power to engage in transactions or sales that involve trust property. When real property is contained in a trust, the trustee’s powers usually include the ability to receive and hold title, dispose of the property when necessary, and either lease or mortgage such property.
Trustees are required to abide by certain rules and regulations, which include record-keeping duties as well as fiduciary and accounting duties. When a trustee distributes money, sells property, or engages in a transaction involving trust assets, he or she must provide notification to all beneficiaries. These disclosures must include detailed receipts, containing information regarding what was sold and the parties involved. Such notification is important to ensure the trust’s assets are being handled properly. Trustees, in their capacity as fiduciaries, are required to act in the best interest of the trust’s beneficiaries, rather than in their own self-interest. Trustees engaging in transactions that serve only their self-interest may be found in breach of their fiduciary duties, and they may be removed from their position through legal measures.Protect Your Interests by Consulting an Estate Planning Lawyer in Nashville
As a living grantor or a beneficiary, you have certain rights to ensure that your trust is being managed appropriately. The Nashville estate planning attorneys at Martin Heller Potempa & Sheppard PLLC can help you determine whether proper protocols are being followed in alignment with a trust’s purpose. Our firm assists clients throughout Davidson and Williamson Counties, including in Franklin, West Meade, Cool Springs, and Hermitage. Call us at 615-800-7096 or contact us online for a free consultation with a trust administration attorney.