Selling a House as a Trustee

When it comes to selling a house as a trustee in California, there are a few essential aspects that you need to consider. As a trustee, you have a fiduciary duty to act in the best interests of the trust’s beneficiaries. You must follow the proper legal procedures and make informed decisions throughout the selling process.

Understanding the Role of a Trustee

Before we delve into the process of selling a house as a trustee in California, it is vital to understand the role of a trustee. A trustee is an individual or entity holding legal title to the property and managing it for its beneficiaries. In selling a house, the trustee can decide and act on the trust’s behalf.

• Review the Trust Documents

One of the first steps you should take as a trustee is to review the trust documents. The trust documents outline the powers and responsibilities of the trustee, as well as any specific instructions regarding the sale of real estate. It is crucial to familiarize yourself with these provisions to ensure compliance.

• Obtain Professional Guidance

Selling a house as a trustee can be a complex process, especially if you are unfamiliar with the legal and financial aspects. Obtaining professional guidance from an attorney specializing in trust administration is highly recommended. An attorney can provide valuable advice and ensure that you fulfill your duties as a trustee per California law.

• Appraise the Property

Before listing the house for sale, it is essential to obtain a professional appraisal. An appraisal will determine the property’s fair market value for setting an appropriate asking price. The appraisal report will also serve as supporting documentation if the beneficiaries or other interested parties later question the sale.

• Prepare the Property for Sale

Showcasing the property in its best light is crucial to attract potential buyers and maximize the sale price. As a trustee, you are responsible for preparing the property for sale. That may include performing necessary repairs, decluttering, staging, and enhancing curb appeal. Consider hiring professionals to assist you in these tasks to ensure a high-quality presentation.

• Consult with a Real Estate Agent

While it is possible to sell a house as a trustee without the assistance of a real estate agent, working with a professional can streamline the process and increase your chances of a successful sale. A real estate agent with experience in trust sales will have the knowledge and network to market the property effectively, negotiate offers, and handle all necessary paperwork.

• Obtain Court Approval 

In certain situations, it is necessary, such as when the trust terms require court approval for the sale of real estate, you may need to seek court approval before proceeding. Consult with your attorney to determine whether court approval is necessary in your specific case and to guide you through the court approval process, if required.

• Market and Sell the Property

Once all the necessary preparations are complete, it is time to market and sell the property. Your real estate agent will develop a comprehensive marketing strategy to attract potential buyers. That may include listing the property on multiple listing services, advertising online and offline, hosting open houses, and utilizing various marketing channels. Your agent will also handle inquiries, negotiate offers, and guide you through the closing process.

• Distribute Proceeds to Beneficiaries

After the successful sale of the house, it is your responsibility as a trustee to distribute the proceeds to the trust’s beneficiaries. The distribution should be done according to the instructions laid out in the trust documents and applicable laws. Keep accurate records of the sale and distribution process to ensure transparency and accountability.

What you should know before selling trust property as a Trustee in California: 

Selling a house as a trustee in California requires careful planning, adherence to legal requirements, and professional guidance. By familiarizing yourself with the trust documents, obtaining expert advice, properly appraising the property, preparing it for sale, engaging a real estate agent, and following the necessary procedures, you can successfully fulfill your role as a trustee and ensure a smooth and efficient sale process.

Fiduciary Duty When Selling Trust Property

When a trustee sells trust property, they have a fiduciary duty to act in the best interests of the beneficiaries. Breaching this duty can lead to legal consequences. In California, a trustee can be held personally liable for violating the terms of the trust or for breaking the law if they improperly manage, distribute, or distribute the trust’s assets properly. Examples of trustee breaches of duty include self-dealing, blending, and misusing trust assets.

If trustees breach their duties, they may be personally liable for any losses the trust beneficiaries suffer. The beneficiaries may also be able to have the trustee removed from their position and replaced with another trustee. Suing a trustee for a breach of fiduciary duty in California requires demonstrating damages incurred, and compensation is contingent on establishing a loss due to the violation. Suppose you are a trust beneficiary and believe the trustee has breached their duties. In that case, you should consult an experienced trust attorney to discuss your legal options. 

Trustee breaching their fiduciary duties. 

Need more information on trust litigation? Or, removing a trustee, check out our complete Overview of California Trust Litigation, available on our website. If you have more questions about your rights as a Beneficiary and what you should know moving forward.

To learn more about the nuances of trust property, check out the following articles listed below.  

“Can a Trustee Sell Trust Property Without Beneficiaries’ Approval?” “What Does Putting Property in a Trust Mean?” “Is a Trust the Best Option for Your Property?” What Are The Common Mistakes Trustees Make When Selling Trust Property?” 

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