Legal Question in Wills and Trusts in California

trust distribution and real property

Is there a limit to how long we can

keep real property in the trust, as

long as the four of us kids agree? Is

there a negative to doing this? The

trust says that we must distribute

after 21 years.

We have a house on the market and

we were waiting for it to sell to decide

what to do with all the rest. The

house looks like it isn't going to sell.

Thank you very much for you help..


Asked on 4/19/08, 7:31 pm

3 Answers from Attorneys
Frankie Woo Fiducia Legal

Re: trust distribution and real property

There may be adverse tax consequences when the trust sells the house after long period of time. Also the trust may not be able to take the personal residence capital gain exclusion to avoid the capital gain. Check with a tax expert on this.

Read more
Answered on 4/20/08, 10:05 am
Mitchell Roth MW Roth, Professional Law Corporation

Re: trust distribution and real property

The trustee of the trust must abide by the terms of the trust. I suspect you may be misreading the meaning of the trust agreement. Most trust has a "rule against perpetuities savings clause" which state that in no case can the trust be maintained beyond "lives in being plus 21 years." Since you have assets in the trust, why doesn't the Trustee hire a lawyer to assist? No advice can be given without the ability to read the trust document.

Read more
Answered on 4/20/08, 2:35 pm
Phillip Lemmons, Esq. Phillip Lemmons APC, Attorneys at Law

Re: trust distribution and real property

If the trust says you must distribute afer 21 years, then you can't hold it longer than 21 years. One negative is that property value may decrease and the trustee might get sued by one of the beneficies. There could be more problems.

Read more
Answered on 4/19/08, 10:58 pm


Related Questions & Answers

More Probate, Trusts, Wills & Estates questions and answers in California