Q: My father-in-law created a revocable trust in New York naming his son the beneficiary of the trust, who was also trustee. It said the settlor (my father-in-law) had use of the home till his death, when the assets were to be divided equally among all the kids.
He died, and the trust was to terminate upon his death. The only asset he had was the house and the housing market is so bad now, that the value of the home is quite low.
The family members need time to fix up the house before they could even think of having it appraised and putting on the market. Since the trust is kaput, should they file a quit claim deed and put it in all of their names?
There are 10 kids who do not like the idea of their addresses being public record, plus there is the hassle of receiving tax bills for 1/10th of the taxes, and other annoyances. Some of the kids live out of state.
Can they just quit claim it from the son’s name as the trustee to his name as an individual for now? Before it was put into a trust, the son was the owner of the property. (The father had put the house in his son’s name.)
A: I’m a little confused by the specifics in your letter. First, the son owned the property. Then, the father created a trust and the son transferred the property into the trust, with the son named as the trustee of the trust. Now, the father is dead, and you claim the trust has terminated and you need to know what to do with the property.
You need to talk with an estate attorney who can help the son understand what he owns, what estate is left, and how any remaining inheritance (after debts are paid) is to be parsed out and how to handle the revocable living trust. Using a quit claim deed doesn’t seem to be the solution to your problems.
While you say that the trust terminated at the time of your father in law’s death, it probably couldn’t terminate until it disposed of all of the assets in the revocable living trust. As the trustee of his father’s revocable living trust, your brother-in-law would need to wind down the revocable living trust and dispose of the property in it. The revocable living trust is probably still valid and will be valid until the assets in the trust are sold or removed from the trust.
While the trustee could us a quit claim deed to get rid of the property (or could transfer the property using a trust deed or other appropriate document) from the trust to the ten children, the trustee could also wait to do that at the request of all the children and then work with the children to have the property sold with the money distributed to the children. You might not need to be in such a rush to sell the property and may have more time than you think to prepare the home for sale.
The estate attorney could review the trust document and help you understand the legal requirements of the trustee in doing his duties and the timing involved.