Legal Question in Wills and Trusts in California

I am asking this question again more clearly, in case of any confusion. My Mom passed away in June of 2010. My brother is Steve Richardson (Trustee). I am Alex Richardson. 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 of the residence 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: If Alex Richardson elects to reside at the property, is it fair that he pays the full amount of property tax and homeowners insurance for ten years while residing at the property, or should Steve Richardson (Trustee) pay half of the property tax and insurance for ten years, since he is also half owner of the property? (Please note: Steve Richardson (Trustee) does not reside at the property).


Asked on 11/13/12, 7:29 am

1 Answer from Attorneys
Michele Cusack Pollak & Cusack

Of course you should pay all the property tax and insurance. Even if title is still held in the trust, the property has basically already been distributed to you; the fact that you haven't paid the reimbursement to your brother yet doesn't make him responsible for 1/2 the expenses on the property which only you occupy!

But say that technically, the Trustee should pay half. In that case, you should pay rent to the trust, at fmv, which would probably be considerably higher than the property taxes and insurance. So, I wouldn't fight this battle if I were you.

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Answered on 11/13/12, 7:48 am


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