What is a trustee’s duty to distributetrust proceeds to beneficiaries?

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What is a trustee’s duty to distributetrust proceeds to beneficiaries?

Our last living parent died a few years ago; he left a house and other financial assets to be divided among all the adult children. Our oldest sibling was named trustee and settlor and wrote up a trust for the family. Can the trustee choose to not sell the house and instead rent it out cheaply to his children, thereby, never allowing the proceeds to go to the rest of the beneficiaries?

Asked on June 28, 2011 under Estate Planning, Minnesota

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I am so sorry for your loss. As I am sure that you are aware, the key document here is the trust and how the trust is written will hold the answer to this question.  If the trust was created during your parents lifetime and states that upon their death it is to be dissolved and the proceeds divided amongst the beneficiaries, then no, the trustee can not choose to keep the trust alive.  A trustee holds a fiduciary capacity and is held to a very high standard. Acting against the wishes in the trust could get your sibling in to trouble.  You must seek to have the trust document read by someone familiar with your state law as well.  Good luck to you.


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