Legal Question in Wills and Trusts in California
My Mom passed away in June of 2010. I am Alex Richardson. My brother Steve Richardson is the Trustee after her death. 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 property shall be valued at its 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.
I was told that this is an irrevocable Trust after the death of the Grantor.
1) In the Trust Agreement "Revocation and Amendment" - Except as hereinabove provided, this Agreement and the Trust is irrevocable and shall not be subject to amendment. In the event of any revocation, the revoking party shall indemnify the Trustee in a manner satisfactory to it against liabilities by the Trustee.
My Mom's attorney, who is currently representing my brother as Trustee, is insisting on an appraisal of the property to buy my brothers half of the property as soon as possible by getting a loan, which I cannot afford at this time. He stated if I do not cooperate it will work against my best interest.
My question is: If I do not agree to the appraisal at this time and I abide by the terms of the agreement to continue living in the house until the tenth anniversary of the Grantor's death, do they have any right to insist or harass me to get an appraisal and to get a loan at this time?
I would like to buy my brother's half of his share of the property when I can afford paying the monthly payments on a loan at such time, but must I agree to have an appraisal at this time since I cannot afford a loan at this time?
1 Answer from Attorneys
It does like it is in your best interest to get the property appraised now.
The trust terms seem to separate the valuation issue from the payment issue to equalize the distributions.
From what you have stated, there is no requirement for you to pay now, by getting a loan on the property, to equalize the interests. You might be able to pay on or before June of 2020 for that equalization payment.
There are other issues to be concerned with. The most important is probably the property tax issue. If you buy-out your brother, 1/2 of the property is going to get a new value for property tax purposes. If the Trust borrows the money and you get the house and your brother gets more cash, then the property taxes will not increase due to a re-appraisal.
You should retain an attorney to represent your interests and have that attorney review the trust and the assets and liabilities of the Trust and work with your brother's attorney to resolve what is in everyone's best interest.
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