not2cleverRed
Obvious Observer
What is the name of your state? MA, NY
TL;DR What should beneficiaries do when a Trustee refuses to abide by the terms of the trust? At what point should a Trustee be replaced?
My parents (MA) established a real estate trust for property owned in Massachusetts and NY. There are 3 beneficiaries, I'll call them A, B, C. A is the Trustee, B and C are listed as successor trustees, as is another sibling, D (who is not a beneficiary). I'm B.
Both parents have passed away. It's been almost 2 years.
There is a section of the trust addressing stating that upon the passing of the grantors:
The undeveloped lot in NY be conveyed to A.
The adjacent lot with the house is to be conveyed to B and C. Well, 75% of the ownership. D already has 25% ownership.
The section was most recently amended in 2023 to update language and clarify some details.
(Nothing is explicitly stated about the Massachusetts house, but that's another issue.)
No property has been conveyed. The Trustee has referred to the powers he is endowed by the trust (out of context screen shots). He somehow thinks that those powers give him the discretion to supersede the specifically stated instructions within the trust. (He wants to subdivide and sell. B, C, and D are all against that.) I read what he cites as mostly boilerplate stuff granting the Trustee the ability to do the work of the trust.
B and C have met with the estate lawyer to clarify our understanding. We have paid for an independent appraisal. The Trustee's independent appraisal is almost 50% higher than the one we obtained. (Both appraisals are above the Zillow estimated range.) The lawyer is starting the paperwork to go forward. Communications within the past 48 hours include:
1. A request from the paralegal for information she needs to prepare documents to transfer the NY properties.
2. A reply from the trustee (A) that he is not transferring the NY properties at this time.
3. The lawyer's reply that included the statement "You do not have the power to not follow the terms of the Trust which dictate the transfer of that property to B and C."
4. The trustee's (A) reply that a) he needs an offer from B and C to buy out D's 25%, and that a fair offer would be 50% of the appraised value he obtained. And unless things change within 5 days, he plans on proceeding with a NY lawyer to begin the process of subdividing the property.
5. The lawyer informing A that B and C had already extended an offer to D based on 25% of the average of the two appraisals. And that 50% far exceeds 25%. And D has been nonresponsive to communications from the law office.
I am concerned that the Trustee's resistance is crossing over to defiance. For the moment, I'm inclined to not reply to any of these messages, because I have nothing to add. However, C and I are the point where we really see no potential for progress so long as A is a trustee. The lawyer has never been so blunt before.
TL;DR What should beneficiaries do when a Trustee refuses to abide by the terms of the trust? At what point should a Trustee be replaced?
My parents (MA) established a real estate trust for property owned in Massachusetts and NY. There are 3 beneficiaries, I'll call them A, B, C. A is the Trustee, B and C are listed as successor trustees, as is another sibling, D (who is not a beneficiary). I'm B.
Both parents have passed away. It's been almost 2 years.
There is a section of the trust addressing stating that upon the passing of the grantors:
The undeveloped lot in NY be conveyed to A.
The adjacent lot with the house is to be conveyed to B and C. Well, 75% of the ownership. D already has 25% ownership.
The section was most recently amended in 2023 to update language and clarify some details.
(Nothing is explicitly stated about the Massachusetts house, but that's another issue.)
No property has been conveyed. The Trustee has referred to the powers he is endowed by the trust (out of context screen shots). He somehow thinks that those powers give him the discretion to supersede the specifically stated instructions within the trust. (He wants to subdivide and sell. B, C, and D are all against that.) I read what he cites as mostly boilerplate stuff granting the Trustee the ability to do the work of the trust.
B and C have met with the estate lawyer to clarify our understanding. We have paid for an independent appraisal. The Trustee's independent appraisal is almost 50% higher than the one we obtained. (Both appraisals are above the Zillow estimated range.) The lawyer is starting the paperwork to go forward. Communications within the past 48 hours include:
1. A request from the paralegal for information she needs to prepare documents to transfer the NY properties.
2. A reply from the trustee (A) that he is not transferring the NY properties at this time.
3. The lawyer's reply that included the statement "You do not have the power to not follow the terms of the Trust which dictate the transfer of that property to B and C."
4. The trustee's (A) reply that a) he needs an offer from B and C to buy out D's 25%, and that a fair offer would be 50% of the appraised value he obtained. And unless things change within 5 days, he plans on proceeding with a NY lawyer to begin the process of subdividing the property.
5. The lawyer informing A that B and C had already extended an offer to D based on 25% of the average of the two appraisals. And that 50% far exceeds 25%. And D has been nonresponsive to communications from the law office.
I am concerned that the Trustee's resistance is crossing over to defiance. For the moment, I'm inclined to not reply to any of these messages, because I have nothing to add. However, C and I are the point where we really see no potential for progress so long as A is a trustee. The lawyer has never been so blunt before.
