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Petition to end trust uneconomically low principal

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gypsyblle

Junior Member
What is the name of your state (only U.S. law)? California

I need information regarding Correct titling on a petition to end a revocable trust in Santa Clara County.

Reasons include
trust has uneconomically low principal approximately $50,000

circumstances have changed and continuing the trust would defeat or weaken the trust.

reason for changing or ending the trust outweighs the interest in carrying out the purpose of the trust

BACKGROUND:
Trust was amended by the (2) beneficiaries within the last 3 years to provide that Beneficiary (A) would receive their full share of inheritence per trust provisions while Beneficiary (B) would be allowed to buyout (A) interest in the family home.

(B) remains in the family home. Home is not deeded back into trust. Trust provided that (B)'s distribution of funds be over a 25 year period.

Due to economic situation
house value has decreased below value of loan
(B) has sustained wage loss due to injury and cut in hours worked.

Currently (B) is facing foreclosure of the home. Being allowed to access the remaining balance of trust would allow him to use $22,000 to save the home. The remaining balance can be used to supplement is unstable earning situation.
 


gypsyblle

Junior Member
response to question

I am assisting the only remaining beneficiary. Trust is managed by a "trustee company". They have refused to distribute the remaining amount and have quite returning his phone calls.

Because of the small amount and this is his only remaining asset, with facing foreclosure, I beleive petitioning the court directly is the quickest and most efficient option.
 

tranquility

Senior Member
The court is not going to order what you want. You have to petition the court to replace the trustee for breach of fiduciary duty.

I don't see that here. The trust is not to the level of uneconomically low principal unless the trust was written very specifically and in an odd manner. The trust should be distributed as it lists, it is unlikely to be a "revocable" trust, or, if it is, the grantor should just change it to meet the goals.

I'm assuming the trustee feels the distribution you desire does not meet the terms of the trust, right? For example, "saving" an upside down home may be a breach even if the trust wants the beneficiary to have a place to live.
 

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