Legal Question in Real Estate Law in California
My question has to do with real property. My mother and her sister are 50% / 50% co-trustees of a piece of real estate in Oakland, California.
How can my mother buy out my aunt without my aunt knowing that she is the one purchasing the property? I am not sure she would sell it to her or if she did it would be above the market price.
The home has been listed with a realtor since a May 31, 2010 listing and is due for renewal yesterday and my aunt has not authorized extending the listing to October 31, 2010. The cooperation from my aunt has been very very difficult. HELP
3 Answers from Attorneys
Sounds like you're asking an attorney how to help defraud someone. The best advice you are likely to get is, not to try to do so. If an agreement can't be reached honestly, then it shouldn't be attempted any other way. Even if you did this, when the seller discovered the fraud, they could sue, so you wouldn't have really gained anything worthwhile.
If there is no agreement, one party can file suit to obtain a court order for sale. Consult a local probate litigation attorney for help.
Co-trustees only have legal title, and not equitable title. The property is actually in a trust, to be managed by the co-trustees pursuant to the terms of the trust. What is relevant, is what the terms of the trust specify.
Co-trustees who can't agree require court intervention.
It's not really possible to give a fully-reliable answer without reviewing the trust. Co-trustee situations present additional difficulties because, under law, they must act unanimously unless the trust instrument allows otherwise.
I'm uncertain that co-trustees are fiduciaries of one another, but each is certainly a fiduciary of the beneficiaries. Each co-trustee must take steps, when possible, to protect the beneficiaries from improper conduct by each other co-trustee. Hostility between co-trustees can be a ground for removal of a trustee, although it would be up to a court to decide which one, if either or any.
Here, I think it would clearly be a breach of duty for a co-trustee to acquire trust property from the trust without full disclosure to, as well as the cooperation of, the other co-trustee.
The solution is to gain the informed consent of the other trustee, or have the other trustee removed (or replaced) by a court.