Legal Question in Wills and Trusts in Massachusetts

Re: reamindermen

The trustee may make a loan only if (1) the terms of the trust explicitly authorize the trustee to lend trust assets and (2) if it is in the best interest of the trust and ALL of the beneficiaries to make the loan.

I STRONGLY suggest that before making ANY loans to anyone, you meet with an attorney with experience in trust administration, and bring copies of the trust and the current bank and investment statements with you. Keep in mind that an unhappy beneficiary can sue a trustee for improperly administering a trust! If the trustee is found liable for improper administration, he or she may be forced to make up the loss out of his own pocket.

Please feel free to contact me if I can be of assistance.

Re: reamindermen

The answer to this question depends on the language of the trust. Some trusts permit the trustee to make loans to beneficiaries; others do not. Some trusts go so far as to set forth rules concerning the rate of interest that may or must be charged for such loans. If a trustee makes loans to a beneficiary without authorization from the trust to do so, this is grounds for removal of the trustee and for a lawsuit in which the trustee can be held personally liable for the amount of such loans (assuming they are not repaid). Feel free to contact me to discuss any further questions you may have.

Re: reamindermen

If you go back to the attorney that originally drafted the trust, he/she might be able to tell you if you are allowed to or not. They shouldn't charge you for a quick question.

Re: reamindermen

A trustee may make a loan if he is authorized to do so. He may make that loan if it is in the best interest of the trust, as well as both current and future beneficiaries.

Please feel free to contact me if you have more questions.

I would suggest both the trustee and the beneficiary meet with an attorney to make sure that what they do is permissable under the trust and it is properly documented.