Does a Beneficiary have the first choice in buying a home in a trust?

UPDATED: Oct 1, 2022

Advertiser Disclosure

It’s all about you. We want to help you make the right legal decisions.

We strive to help you make confident insurance and legal decisions. Finding trusted and reliable insurance quotes and legal advice should be easy. This doesn’t influence our content. Our opinions are our own.

UPDATED: Oct 1, 2022Fact Checked

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

Does a Beneficiary have the first choice in buying a home in a trust?

John passed away and left a Trust naming his daughter Mary as the Trustee. In the
trust John also named his son Barry as a beneficiary. The only item in the trust
is Johns home, paid free and clear. Mary now wants to sell the home.

Does she have to offer to sell it to Barry before anyone else?
Can Barry contest the selling price?

Asked on July 1, 2019 under Estate Planning, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

1) No, a beneficary has no right of first refusal or other first chance to buy a trust asset, unless the terms of the trust (the trust documents) specifically say he does.
2) A trustee has a "fiduciary duty" to the beneficiaries. Among other things, this is a duty to be loyal to their interests and exercise the same degree of care in managing the trust (including selling assets) for them as a reasonable person would for his/her own assets. So if she seems to be selling for an unreasonably low price--not that she's not getting the best price possible, since with real estate, you can't guaranty the "best price"; rather, that is it unreasonably below comps--he could bring a kind of legal action in county court called an action "for an accounting" to make her account for her actions. A judge could force her to raise the price or, if already sold for too low, to possibly pay her own money into the trust to raise the proceeds to a reasonable level.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption