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Attorney Randy Ratliff

Transactions or Sales Involving Trust Property

Estate Planning Attorney Representing Nashville Residents and Families

A trust is a legal arrangement created by a trustor that allows a trustee to hold assets transferred from the trustor on behalf of beneficiaries. There are many different types of trusts, but one key feature of them is that they can allow probate to be avoided. When a trust is set up, the trustor may set forth rules about how assets will be used. A trustee has a fiduciary duty to abide by the terms of the trust and act with the highest level of care in connection with transactions or sales involving trust property. Trustees are not allowed to act in their own interests during these transactions. Randy Ratliff is an experienced Nashville estate planning lawyer who can help you set up a trust or represent you in a breach of fiduciary duty proceeding when trust property has been mishandled or improperly sold.

Transactions or Sales Involving Trust Property

When establishing a revocable trust, the trustor appoints a trustee to oversee the assets in the trust and how they are handled or sold. Often, the trustor acts as the trustee during their lifetime and maintains the right to change the trust as necessary. In contrast, when an irrevocable trust is established, all ownership interests are permanently transferred to the trust, and the trustor cannot make changes. The trustee is someone other than the original trustor, and they can enter into transactions with third parties when the trust instrument grants this right or requires it based on the trust's purpose.

When a trustee has the power to engage in transactions or sales of trust property, they have an obligation to act with the highest degree of care. Transactions could include the ability to dispose of real property or lease it. They could include the power to mortgage real property or grant an easement. If the property includes bank accounts, the power to engage in transactions and sales could include the power to buy stocks with the funds, or invest the funds from the bank accounts so that they grow.

Trustees are fiduciaries. They are expected to abide by various obligations when managing trust property. They should keep records and accountings. They also need to follow rules and notify beneficiaries of the trust about their actions, including what the transaction was and which parties were involved. They must act in the best interests of the beneficiaries rather than in their own self-interest or the interest of someone else. They cannot engage in self-dealing.

A trustee who engages in a transaction or sale that serves their own self-interest can be held liable for a breach of fiduciary duty, usually with the assistance of an attorney. It is possible to remove a trustee who does not abide by their duties with regard to transactions or sales involving trust property. However, you need to have information about what the trustee has done. Trustees are supposed to provide appropriate notification from which you can determine whether they are abiding by their duties.

If you are a beneficiary of a trust who believes that the trust's trustee has not been meeting their fiduciary duties, you can request an accounting to make sure that property is being handled competently and appropriately. The trustee should divulge the actions that they have taken on behalf of the trust, and they should provide detailed documentation related to property sales and other transactions. Improper accounting is a breach of fiduciary duty that can itself lead to a trustee's removal. Other reasons for removing a trustee include misappropriation, fraud, self-dealing, or failing to respond to beneficiaries' requests for information about transactions or sales. For example, if a trustee invests all of the trust property into their own company, this is self-dealing.

Retain a Knowledgeable Estate Planning Lawyer in Nashville

If you are a trustor or beneficiary, you are entitled to make sure that trust property is being handled appropriately. As a trustee, you may need legal advice to ensure that you abide by your duties. Whatever your relationship to the trust property, Attorney Randy Ratliff may be able to advise you or represent you in connection with transactions or sales involving trust property in Nashville or the surrounding areas. He also represents people elsewhere in Davidson and Williamson Counties, including in Brentwood, Goodlettsville, Joelton, Franklin, Cool Springs, Antioch, Hermitage, and Madison. Contact us by calling 615-656-8282 or completing our online form if you have a concern about trust administration or related issues.