Legal Question in Real Estate Law in California
My Mother has a family trust. She has alzheimer's and is on a serious decline. My sister and I are co-trustees on the trust and have pwr/attny for her. We are in the process of selling her home to pay for her care and as it stands right now all proceeds from the sale will go into her bank acct that has my name on it since I pay her bills. However, my sister has a judgement against her that I believe is the IRS. The title co. has informed our realtor that should my Mother pass prior to the sale, my sister/ I are then the "sellers" of the property and not just "co-trustees" and they have said the judgement would be paid off the top of any disbursements of money. Since the will and all documents state it is a 50/50 split, I feel I should get my half of the profits and then any judgement should be taken from her half. The title co is stating that it's off the top just as if we were a married couple or something. What is correct as far as the disbursement of funds?
4 Answers from Attorneys
The question you ask is far too complicated to get a meaningful response in this forum. Consult with a local attorney knowledgeable in real estate and trust administration. Should you want a free telephone consultation, feel free to contact me. Otherwise, you need to consult with another attorney regarding your options.
I'd agree with Mr. White in that answering this question would require some research, and that few attorneys would have direct experience with the specific question. Further, the type and terms of your mother's trust may affect the result. Having said that, in somewhat similar instances (involving joint tenancy rather than co-turteeship), the lien would affect only the interest of the actual lien debtor, and not the interest of the co-owner not owing the debt. Further, it seems appropriate for your sister to make you whole for any claim your share might have to bear.
I agree with the others. Off of the top of my head, it seems that if your mother died before the sale, and the property was in trust, the trustees would have legal title to sell, but not equitable title if their were other beneficiaries. If you and your sister are trustees, and the only beneficiaries, a court may find that the trust has ended, but it seems that your sister's share would only be subject to attachment or levy upon distribution, not simply by her actions as a co-trustee.
I agree with the others. Off of the top of my head, it seems that if your mother died before the sale, and the property was in trust, the trustees would have legal title to sell, but not equitable title if there were other beneficiaries. If you and your sister are trustees, and the only beneficiaries, a court may find that the trust has ended, but it seems that your sister's share would only be subject to attachment or levy upon distribution, not simply by her actions as a co-trustee.
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