Legal Question in Wills and Trusts in California
I would appreciate if you can define this paragraph again, as a few lines were left out:
My Mom passed away in June of 2010. My brother is the Trustee. On the Trust it states that the Trustee shall divide the children's Trust into two equal shares, one share for each of the Grantor's two children Steve Richardson and Alex Richardson. Provided Alex Richardson is living at the Grantor's death and elects to receive the improved real property at [Address], the property shall be distributed to Alex Richardson as part of his distributive share. The real property shall be valued at its net fair market value, net of selling expenses, which shall be assumed to be 10% of the fair market value. The amount so calculated shall be referred to as the Net Fair Market Value. In the event the net fair market value is greater than the share Steve Richardson receives, Alex Richardson shall pay such amount as required to equalize the difference in distributions between Steve Richardson and Alex Richardson not later than the tenth anniversary of the Grantor's death.
My question is, can Alex Richardson live in the house for ten years before making any payment, or does he have to pay something now in order to continue living in the house?
2 Answers from Attorneys
Alex, perhaps what you didn't understand from previous replies is that even if you are completely in the right, you will need a lawyer to help you fight your brother and his lawyer, especially since your brother is the trustee and probably still holds legal title to the property.
Also, I wonder if the trust specifies WHEN the fmv of the property is to be determined. You might be better off paying him off now at a lower value and lower interest rate (and perhaps at a discount for early payment if you have a good lawyer to negotiate for you) than waiting until 2020. On the other hand, if it is absolutely impossible for you to get a mortgage, you want to put off the payment as long as possible and hope to sell the house for a higher price when the deadline nears. So, get a lawyer.
*Not legal advice.*
Yes he can; no he doesn't have to pay anything now. Interesting buy out provision in that it fixes the amount of the payment on a valuation of the house minus only 10%, not any loan balance.
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