How a Trustee’s Failure to Sell a Trust Asset May Cause Harm
During the trust administration process, the trustee is responsible for managing and protecting the assets of the trust. This includes an obligation to sell trust assets when directed to do so under the trust instrument or when circumstances call for it. When a trustee does not carry out this responsibility promptly and diligently, the result can be harm to the beneficiaries.
Six Ways Failure to Sell a Trust Asset Can Cause Harm
How might the beneficiaries be harmed by a trustee’s failure to sell a trust asset? The following are six examples:
- Changes in market conditions could dramatically impact the price that the trustee is ultimately able to obtain for the asset.
- Current economic conditions could dictate that the trustee would be much better off selling a particular asset and instead investing the proceeds into another, more productive, form of asset.
- The asset may be consistently under performing or failing to produce income. This costs the beneficiaries potential income or value of their interest in the trust.
- On the other end of the spectrum, holding the asset may be risky under current market conditions.
- Failing to sell the asset in a timely manner could cost the trust in the form of willing buyers and purchase price.
- Failing to sell the asset in a timely manner may also cost the trust in the form of carrying and holding costs for the asset.
When actions of a trustee are causing harm to your interest as a beneficiary, litigation may be your best recourse. An experienced attorney can help you determine whether a legal battle makes sense given the circumstances. We encourage you to start learning more about this process by reviewing our helpful and free book.
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