May A Trustee Sell Assets Without the Knowledge of the Beneficiary?

 

 

Video Summary


May a trustee sell assets of a trust without the knowledge of the beneficiary? The answer is yes, they can. The trustee is in a fiduciary. Has a fiduciary obligation to the beneficiaries. As part of a trust administration, the trustee is supposed to supply a copy of the trust or offer a copy of the trust to all the beneficiaries. In addition to that, they should provide you with an inventory, the assets and the estate and every year provide you with an annual accounting. That way you can monitor what actions have been taken by the trustee.

 

They do have the obligation to treat this or handle these things on as a prudent investor or someone who has the beneficiary's interest at the forefront. That's the reason why you should be getting an annual accounting. You say, "Well, the trustee hadn't given me any information. The trustee hadn't given me an inventory or an accounting or anything else and they're selling off assets." Well, that's where you need to probably consult with an attorney to see about making demand on the trustee and possibly filing a petition to have the trustee removed and force them to provide you with an accounting.

 

If you get an accounting and you believe that the trustee has sold assets for less than fair market value, well then the trustee can be charged and surcharged and removed for dissipation of the trust assets. The trustee does have the power to sell trust assets and does not have to consult with the beneficiary. They are responsible if they act irresponsibly and liquidate these assets.

 

My philosophy is always to try and be as transparent as possible with the beneficiaries and let them know what's going on. Just because the beneficiary disagrees with the trustee, if the asset is being sold at market value or close to it, I think the trustee is protected.

 

Hopefully that answers your questions. I could certainly have heard where some trustees just go ahead and do whatever they need to do and they don't tell anybody about it and may abuse their ability or the right to sell trust assets. If you have any questions, give me a call at 727-847-2288.