For those wondering “can trustee sell property of a trust without all beneficiaries approving,” and “can the trustee sell the house belonging to the trust,” the short answer is this: A trustee of a New York trust does not have to seek approval of the beneficiaries. Once the trustee is designated by the trust, the trustee may act to manage the assets of the trust. That can include a house, bank account, stock portfolio, automobiles, and any other assets of an estate.
Some trusts do have a provision that the trustee has to consult the beneficiaries before making a decision to sell the house. But a lot of trusts do not.
Even though the trustee usually does not legally have to have the beneficiaries’ approval, it may still be a good idea for the trustee to communicate with the beneficiaries in a way that can be later proven in court (such as email) to confirm in writing that they agree with the trustee’s decision.
For example, if the trustee is selling a property of the trust, such as a house or a business, the trustee will do well to advise beneficiaries of the price for which the asset is being sold and confirm in writing that the beneficiaries are comfortable with that price, so as to avoid being sued in the future for “selling it under market value.” So does the trustee have the final say? Yes. But is it a good idea to for the trustee to sell the property without all beneficiaries approving? Not really. Putting himself in such a risky position is what a trustee cannot do.
Having your New York trust and estate lawyer get a release form beneficiaries is especially crucial when the transaction in question involves the trustee personally, such as when the transaction is between the estate and the trustee or the trustee derives some sort of benefit from the transaction. For example, if the trustee is transferring a share of the trust’s business, house, or other property to themselves, the trustee should obtain a written release from the beneficiaries, or at least get them to approve it in writing, in order to avoid the possibility of being sued. Transferring assets to yourself often triggers feelings of inequity in beneficiaries, so it is important to communicate with them, explain that they are still getting a fair share of the trust, and that they are actually getting more money than they would have if not for you buying them out because of cost savings on transaction costs such as paying a broker. It is important that there is a feeling that the trustee fulfilled his responsibilities to the beneficiaries.
It is important to get the release from the beneficiaries that states that they are satisfied with what they are getting and are never going to sue the trustee. The best release comes with an informal accounting, which provides a summary of what property went into the trust, what the expenses were, and what is the share of the trust for each beneficiary.
Can the trustee sell property without all the beneficiaries approving? Can the trustee sell the house? Does the trustee have the final say? – The trustee does not have to seek the beneficiaries’ approval, but in many cases, it is better to do so before the transaction rather than to be sued by the beneficiaries later.
Albert Goodwin, Esq. is a New York wills, trusts and estate lawyer since 2008. He can be reached at (212) 233-1233.
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Albert Goodwin is a great new york estate lawyer, helped me every step of the way.