Most family trusts keep the parents home in the trust and 1 kid is successor trustees and rest of kids equal beneficiaries. Has anyone included a must sell trigger after 1 or more generations?
After your kids become trustees, and they have kids, things start to get complicated as to new crazy spouses and grandkids with regard to selecting future successor trustees.
Stories of the elderly trustee marrying a golddigger who steals everything originally intended for his kids. ( I know this was a fail in the original trust language letting her have complete control, but just use it as an example sceanero)
(I also get this is a good case for irrevocable trust naming grandkids as beneficiaries.)
Would it be prudent to include a must-sell clause when the first successor trustee grows old and needs to select a replacement but instead just triggers a sale of the property?
I don’t see an issue having the rents being divided up more and more as heirs multiply. Just one example, there’s a trust that owns about 10 million of property on my street in OB after the owners died 60+ years ago.
I have a hunch the property manager is overcharging the trust, but ultimately a lot of money and appreciation is going to the heirs, and probably at some point they’ll all vote to sell.
As far as choosing a trustee, you just pick an established estate attorney who will pass the work down to another one when he retires. There’s no need for a trustee to be a beneficiary with possible future conflicts with other beneficiaries.
I’m not sure why you’d want the trust to specify what is done with the house at all. Let the successor trustee and beneficiaries decide the best way to proceed.
Situations change, often drastically, so it is impossible to tell how the beneficiaries lives will be structures decades in advance.
State how much each beneficiary gets, either in terms of dollars or percentages, and let them figure it out.
That’s what we’ve done. As it has turned out, only one of our children has remained in the area so we predict he will take the house as his share along with some cash while the others will likely take all cash as their share. We would prefer our house be used as a primary residence for a family member, so that arrangement would be A-OK with us. But it’s early yet, we’re hoping they don’t have to cross that bridge for decades. 🙂
In any case, pick a successor trustee who will be fair and impartial and everything should turn out fine. My parents picked me. If you don’t have kids that fall into that category pick someone outside of the family tree as the successor trustee. We know families who have done that.
I don’t know how you protect against a new spouse walking in last minute and taking lion’s share. I had worried about that with my Dad as he remarried what I considered to be a golddigger. He caught on and divorced her after a couple of years. When he passed, I went through his papers and found out they had signed a pre-nup. No one had told me about that.
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