1% owner, 99% Trust: ben. trustees can't be located

[LdiJ]

Say what? A living trust does not become a living trust of the successor trustee. That makes absolutely no sense at all.
But that is 100% irrelevant with whether trust assets can be transferred. The transferral can be done if the trust provides for that transfer.

Since even with clarification there is lots of information missing about this, and even what has been presented is of dubious reliablity, my suggestion is that if she wants to protect her imagined interest in the property, she should gather up all the documentation she can find and contact an attorney to review it.

When its a husband and wife trust it does not become irrevocable until both spouses pass away.

 

[LdiJ]

Huh? I would venture to guess that a great number of small-ish family trusts are structured so that one (or more) of the beneficiaries are also trustees. Certainly enough to not call it "uncommon" and, probably enough to even call it "common".

Maybe, but I have quite a few tax clients with trusts and only one of them is also a beneficiary and a trustee. Although, I do have several where the wife or husband is the beneficiary and the grantor made the beneficiary's spouse the trustee...which always seemed odd to me. For most of my clients though its a brother or sister, or aunt or uncle that is the trustee...someone a step removed from the trust.

 

[FlyingRon]

When its a husband and wife trust it does not become irrevocable until both spouses pass away.

Only if the trust is poorly constructed for tax purposes. Both the husband and wife should have their own trusts.
And you're still using the terminology wrong.

Again, do not confuse the successor trustee with the grantor or beneficiaries. For instance, my sister is the successor trustee of my trust (which will indeed become irrevocable at my death), but the beneficiaries are my children. My sister is an attorney I trust to administer things on the trusts's behalf.

 

[justalayman]

The op states he has a copy of the trust so maybe he can enlighten us as to whether there was one or two trustors.

 

[HRZ]

I have no clue how an ownership situation interest in a home escheats to the state if there is a deeded owner living in the property .

On rethinking, I would think it is safer for now for Mom to PAY the RE taxes and avoid problems on that side . Not paying taxes causes big problems !

I'd sure want to read/ copy that deed as recorded .

I can envision possible confusion sources...but so far just wild guesses in need of research .

1. Grantor/ Trustee intended to provide a life estate to a valued helper ...in general as life estate tenant it's Moms duty to pay taxes and maintenance etc and not lay waste to property. ( In addition to being life tenant she holds a tiny % interest )

2. Somehow the trustees and other beneficiaries treated the equation as Mom got the house , they got other proceeds and moved on. ...

 

[justalayman]

What is escheating are the assets of the trust. If it weren’t for the 99% of the property being in the trust the property would simply sit as is until sold for taxes (if not paid) or an owner finally showed up or it fell to the ground. The state can’t carve out the real estate simply because it is co owned by the trust and the op’s mother. The trusts share is dealt with as any other abandoned trusts property would be.

How the state deals with trust assets, especially real estate, I don’t know.

But I suspect the state may be obligated to sell the trust assets and hold the liquidated funds in the state unclaimed property account. That is only a guess though.

 

[HRZ]

THe amount of activity on something to avoid it being "abandoned " at least around me can be pretty darn low . NO clue about CA issues on escheating ...I would not rule out a different slant ...some manager wants to get rid of a nonprofitable account ... ( I've delt with unwrapping escheated bonds elsewhere with old fashioned paper coupons. elsewhere ...not fun. I can magine its big time no fun with CA real estate )

I am a renewed fan of getting the taxes paid .

AT least conceptually if a trust holds a property being occupied by a quasi life tenant or tenant for life it's far from "abandoned " ....especially if taxes are paid .

 

[justalayman]

The fact there is no trustee means there are no account activities. It is the lack of activities that determines whether an account is considered abandoned or not. Accruing interest or equity is not an account activity. It has to be more of a hands on sort of activity.


This is also based in law, not whether some account manager feels its underperforming. In California that period is three years. The abandoned property laws, generally speaking, do not apply to real estate but I do not believe they could terminate the trust and leave the real estate in the name of the trust and do nothing with it. I could be wrong.

If the op wishes his mother to remain in the house I suggest somebody pay the taxes. If they aren’t paid, the ownership won’t matter. It will be dealt with as any other property with delinquent taxes.

 

[LdiJ]

I have no clue how an ownership situation interest in a home escheats to the state if there is a deeded owner living in the property .

On rethinking, I would think it is safer for now for Mom to PAY the RE taxes and avoid problems on that side . Not paying taxes causes big problems !

I'd sure want to read/ copy that deed as recorded .

I can envision possible confusion sources...but so far just wild guesses in need of research .

1. Grantor/ Trustee intended to provide a life estate to a valued helper ...in general as life estate tenant it's Moms duty to pay taxes and maintenance etc and not lay waste to property. ( In addition to being life tenant she holds a tiny % interest )

2. Somehow the trustees and other beneficiaries treated the equation as Mom got the house , they got other proceeds and moved on. ...

They haven't been found to receive any assets at all.

 

[LdiJ]

What is escheating are the assets of the trust. If it weren’t for the 99% of the property being in the trust the property would simply sit as is until sold for taxes (if not paid) or an owner finally showed up or it fell to the ground. The state can’t carve out the real estate simply because it is co owned by the trust and the op’s mother. The trusts share is dealt with as any other abandoned trusts property would be.

How the state deals with trust assets, especially real estate, I don’t know.

But I suspect the state may be obligated to sell the trust assets and hold the liquidated funds in the state unclaimed property account. That is only a guess though.

I do not see how the state could sell the house if one of the owners is living in it. The state cannot force her to sell her share, no matter how small it is. There is no reason why the house cannot just be deeded 99% to the trust if is it not already that way.

 

[PayrollHRGuy]

I've got a couple of quick questions for the OP. How much is the home worth? How Much are the taxes on the home?

 

[justalayman]

I do not see how the state could sell the house if one of the owners is living in it. The state cannot force her to sell her share, no matter how small it is. There is no reason why the house cannot just be deeded 99% to the trust if is it not already that way.

Well, the point is it is deeded 99% to the trust right now. It’s what happens to that 99% when the trust is dissolved and the assets escheat to the state.

Any owner or agent of an owner or holder such as the state can sell what they hold. In this case it would be the 99%. It matters not if there is person residing in the home. Haven’t you noticed it’s never bothered any state to sell real estate for taxes due regardless of whether the owner is living there or not?

As I said, I really don’t know the mechanics of what happens with real estate held by s trust but the trust itself can be dissolved. I cannot see how the state could leave the house in the name of the (nonexistent) trust because that trust no longer exists once it is terminated but I also don’t see them researching the beneficiaries to be able to allow them to deal with the trust. The only other option I see is the state sell what is held by the trust.

 

[LdiJ]

Well, the point is it is deeded 99% to the trust right now. It’s what happens to that 99% when the trust is dissolved and the assets escheat to the state.

Any owner or agent of an owner or holder such as the state can sell what they hold. In this case it would be the 99%. It matters not if there is person residing in the home. Haven’t you noticed it’s never bothered any state to sell real estate for taxes due regardless of whether the owner is living there or not?

As I said, I really don’t know the mechanics of what happens with real estate held by s trust but the trust itself can be dissolved. I cannot see how the state could leave the house in the name of the (nonexistent) trust because that trust no longer exists once it is terminated but I also don’t see them researching the beneficiaries to be able to allow them to deal with the trust. The only other option I see is the state sell what is held by the trust.

The trust itself is an asset. Why do you think that the state needs to dissolve it?

 

[justalayman]

The trust itself is an asset. Why do you think that the state needs to dissolve it?

A trust is not an asset per se. It is a vehicle to hold assets. It is no more an asset than a bank account. It too is simply a vehicle to hold assets and guess what, when you don’t have activity in a bank account for 3 or more years it is dissolved and the contents are turned over to the state.


hold on a minute. I’ve had an epiphany.

How does anybody know whether there has been any activity in the trust? Unless the bank is the trustee all they would see is the individual assets, if those are actually held in their bank. Now they could cause those individual assets (money held in a bank account and such) to escheat to the state but yes lidj, while I disagree with your statement in general, it does cause me to have a different perspective.

So no, I do not see the trust being dissolved and as such, any property not subject to the abandonemet laws would remain in the trust.


As to the op seeking money from the trust;

Who does the op think they would serve for a suit? Given any tenant in a multi tenant ownership
Situation is jointly and severally liable for all taxes I don’t see op mounting a successful suit unless the state will assign a trustee.

And that is way way beyond my knowledge and won’t go there.

 

[LdiJ]

A trust is not an asset per se. It is a vehicle to hold assets. It is no more an asset than a bank account. It too is simply a vehicle to hold assets and guess what, when you don’t have activity in a bank account for 3 or more years it is dissolved and the contents are turned over to the state.


hold on a minute. I’ve had an epiphany.

How does anybody know whether there has been any activity in the trust? Unless the bank is the trustee all they would see is the individual assets, if those are actually held in their bank. Now they could cause those individual assets (money held in a bank account and such) to escheat to the state but yes lidj, while I disagree with your statement in general, it does cause me to have a different perspective.

So no, I do not see the trust being dissolved and as such, any property not subject to the abandonemet laws would remain in the trust.


As to the op seeking money from the trust;

Who does the op think they would serve for a suit? Given any tenant in a multi tenant ownership
Situation is jointly and severally liable for all taxes I don’t see op mounting a successful suit unless the state will assign a trustee.

And that is way way beyond my knowledge and won’t go there.

She cannot seek money from the trust because there is no trustee to ask to pay the trust's share of the property taxes. If there was a trustee, I am sure that they would pay the trust's share. I wonder though, is there no method to ask a court to appoint a trustee?