Legal Question in Wills and Trusts in California

There are several things mixed up. The Rule Against Perpetuties is from old English common law and applies to all agreements. It basically requires title in the property to vest in some person within about 100 years of the creation of the asset instrument. When the propertry is put in the name of the trust, it has vested and can continue as long as there are assets.

If the trustees are co-equal, one can not do anything without the express approval of the other. Nor can anything be done beyond the instructions of the Trust document. So the trust must provide for its early dissolution for it to be closed down. Money is not real property and does not have an owner [technicially the owner is the USA] so it does not have to vest at anytime. Once an asset is no longer part of a trust it does become part of the assets of an estate. The four of you need to sit down and discuss what you all what done that is within the scope of the trust.

Whether one trustee can act on his/her own will depend on what the trust document says. If it is silent on the subject, than the trustees generally have to act together. If your brother does not want the burden of acting as a trustee he can always resign. Dissolving the trust before the time provided in it would be a breach of his fiduciary duties and could expose him, and you, to liability. The question is why does he really want to break up the trust. It is unlikely from what you have said that there is any rule against perpetuties issue if the trust is only 20 years old and your parents are still alive. The best thing would be for the trustees to meet with a lawyer to discuss the situation and come up with a good solution. If we can help, please feel free to give me a call at 310.478.2541.

Jon Reich

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There is absolutely no rule against perpetuities issues due to a trust existing for twenty years. The rule against perpetuities is either satisfied or violated a the moment the trust is created. It absolutely does not require distribution within twenty years. Although Mr. Shers needs to go back to his first-year law school Property class, since assets cannot vest in a trust and it is the holding in the trust too long that violates the rule, the rule against perpetuities excuse is just that, an excuse for some other motivation for closing the trust. Get to the bottom of that with the trustee, preferably with the help of a local lawyer.