As a Trustee, Can a Property Be Sold

Can a trustee sell a property?

Yes. If one of the trustee’s duties is to sell real estate (which can sometimes be found in the trust instrument), then they have the power to sell the property; if you are unsure if your trustee has this power, set up a consultation with an attorney. When a trustee sells the property, they act on behalf of the trust as a fiduciary. The trustee must act in good faith and per state law and the trust agreement terms. When selling property, stringent record-keeping procedures must be followed so that nothing is missed or overlooked.

What is the trustee’s power to sell a property?

The trustee has whatever powers are specified in the trust instrument. The trust instrument controls what powers they may have. The powers of a trustee are also set out in either state law or state case law (which are legal precedents established by appellate courts). State law may authorize a trustee to sell trust property regardless of what is stated in the trust instrument. In addition, if one of the purposes of the trust is to sell property, that may give rise to another authorization for the sale.

Can a trustee sell a property?

Yes. If one of the trustee’s duties is to sell real estate (which can sometimes be found in the trust instrument), then they have the power to sell the property; if you are unsure if your trustee has this power, set up a consultation with an attorney. When a trustee sells the property, they act on behalf of the trust as a fiduciary. The trustee must act in good faith and per state law and the trust agreement terms. When selling property, stringent record-keeping procedures must be followed so that nothing is missed or overlooked.

What is the trustee’s power to sell a property?

The trustee has whatever powers are specified in the trust instrument. The trust instrument controls what powers they may have. The powers of a trustee are also set out in either state law or state case law (which are legal precedents established by appellate courts). State law may authorize a trustee to sell trust property regardless of what is stated in the trust instrument. In addition, if one of the purposes of the trust is to sell property, that may give rise to another authorization for the sale.

How does a trustee conduct the sale of the property?

A trustee generally conducts the sale of property in the same manner as any other seller, although there are some additional steps that a trustee must take. First, the trustee will need to determine whether an individual or trust owns the property. If it is owned by an individual and not a trust, then no unique action is required.

If a trust owns it, the trustee must prove that they have the power to sell the property. The easiest way to do this is for the trustee to attach a copy of the “Certificate of Trust” to your listing agreement with your real estate agent.

Can a trustee sell the trust property without all beneficiaries’ approval?

At the death of a trustor, all interested parties wonder if the trustee can sell the trust property without all beneficiaries’ approval. The trustee cannot sell real estate belonging to an irrevocable trust without written consent from all beneficiaries. Now if it was a living trust, there might be provisions in the original living trust document allowing for sale without beneficiary approval in some instances. If such provisions exist, they must be followed closely. So, it depends on the trust document. Now, the trustee must complete with the trustor’s wishes, and if selling a property is necessary, then in good faith, it’s for the benefit of the trust and to fulfill the rights of all the beneficiaries it can be sold.

If there are multiple beneficiaries, the unanimous consent of all beneficiaries may be required before making any changes to trust assets. However, suppose the trust contains language that gives sole power to act upon assets to one person or entity. In that case, this power overrides any disagreements among beneficiaries about how trust assets should be managed or distributed.

Can a trustee sell the property to themselves?

In most cases, no. Some trusts allow this – they may state that the trustee is permitted to purchase any property sold by the trust – but most don’t. If you’re thinking about buying property through the trust, check your trust document first. If it doesn’t include a provision for this situation, you’ll probably have to wait until after the trustee sells it.

If you are selling property to yourself as a trustee, you have to be very careful to ensure that you get the same deal that another buyer would get. Otherwise, if there is any challenge over the sale, it could invalidate the whole transaction.

Trustees have to treat all parties fairly and equitably when selling trust property. A trustee cannot sell a property for less than fair market value because they want it. They also cannot use their power as trustees to force others out of a situation so they can have the home or property for themselves.

What is required of a trustee when they sell a property?

The trust document may specify what process the trustee must follow when they sell a property. This can include requiring offers to be publicly advertised and requiring at least two independent valuations before accepting an offer.

Suppose the trust document does not specify how sales are to be conducted. In that case, it is usual for trustees to use an open market sale process which involves advertising the property for sale and inviting offers from potential buyers. To learn more or set up an appointment, call Hess-Verdon at (949) 706-7300!

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