Sale of jointly held property in a Trust.

[Frank nKansas]

Jurisdiction

California

An 8-acre parcel of land in California is owned by six individuals. Three of the individuals own half of the land equally split between them. The second half of the land is held in an inherited Trust with the remaining three individuals sharing the property within the trust equally.

The land is about to be sold and the proceeds will ultimately be split equally between the six individuals. I'm figuring I would leave the Trust intact and allow half of the sale proceeds to be transferred to the trust for distribution after the sale is complete.

The other option would be to dissolve the trust first with each of the three beneficiaries owning their 1/6 of the parcel outright. And therefore each would receive a 1/6th of the proceeds directly. This option might require the services of an attorney and the process would be somewhat complex... I am not sure about that.

It seems that to leave the Trust intact would be the most straight forward way to handle the process. But I am hoping someone on here can shed some light on what should be done. And perhaps point out pitfalls to consider.

Perhaps the deed for the property will indicate it is being sold by the three individuals and by the Trust (four owners in effect).

Thank you!

 

[army judge]

This option might require the services of an attorney and the process would be somewhat complex... I am not sure about that.

Before you attempt or accomplish ANY changes absent the assistance of an ATTORNEY retained by you, my advice is NOT to do ANYTHING until and unless it is attempted and/or accomplished by a real estate attorney you hire.

Whatever you decide, do so ONLY after you've obtained an attorney to advise you, and ONLY YOU.

If the attempt is done, absent the advice, assistance, and direction of an attorney you hire; you just might end up losing EVERYTHING, and/or creating a very big mess.

 

[Frank nKansas]

Thank you AJ for the advice. I will proceed ahead carefully!

Frank

 

[adjusterjack]

Perhaps the deed for the property will indicate it is being sold by the three individuals and by the Trust (four owners in effect).

Perhaps?

Should be easy enough to confirm whether the name of the trust is on the deed. Don't you have a copy of the deed? If not, you can look it up on the County Recorder website and probably download a copy for free.

An 8-acre parcel of land in California is owned by six individuals. Three of the individuals own half of the land equally split between them. The second half of the land is held in an inherited Trust with the remaining three individuals sharing the property within the trust equally.

Correction. The trust (if it's on the deed) owns a 50% interest. The three beneficiaries own nothing and share nothing until the purpose of the trust if fulfilled.

The land is about to be sold and the proceeds will ultimately be split equally between the six individuals. I'm figuring I would leave the Trust intact and allow half of the sale proceeds to be transferred to the trust for distribution after the sale is complete.

Good idea. For the 2 cents my opinion is worth. Are you the trustee of the trust? If yes, you make decisions for the benefit of the trust and its beneficiaries.

The other option would be to dissolve the trust first with each of the three beneficiaries owning their 1/6 of the parcel outright. And therefore each would receive a 1/6th of the proceeds directly. This option might require the services of an attorney and the process would be somewhat complex... I am not sure about that.

That idea would create another step. The property would have to be deeded from one set of owners to another set of owners.

For example: "Trust and persons a, b, and c, as grantors, convey the property to persons a, b, c, d, e, and f."

It seems that to leave the Trust intact would be the most straight forward way to handle the process.

Agree.

But I also agree with Army Judge that the advice of an attorney, and possibly a tax pro, is needed in case unknown factors present themselves.

 

[zddoodah]

An 8-acre parcel of land in California is owned by six individuals. Three of the individuals own half of the land equally split between them. The second half of the land is held in an inherited Trust with the remaining three individuals sharing the property within the trust equally.

So...in reality, there are four owners:

A (trust) - 50%
B - 16.67%
C - 16.67%
D - 16.67%

I don't understand what you mean when you say that "the remaining three individuals shar[e] the property within the trust." Who created the trust? Who is the trustee? Are "the remaining three individuals" (let's call them E, F and G) beneficiaries? How did the trust acquire its interest in the property? What are the terms of the trust as it relates to the property (if any)?

I'm figuring I would leave the Trust intact and allow half of the sale proceeds to be transferred to the trust for distribution after the sale is complete.

This suggests that you might be the trustee of the trust. Correct? If not, who are you in relation to this scenario?

This option might require the services of an attorney and the process would be somewhat complex... I am not sure about that.

Your uncertainty negates your use of the word "might."

I am hoping someone on here can shed some light on what should be done.

In order to comment intelligently about this, one would need to review, at a minimum, the deed for the property, any relevant, prior deeds, and the trust instrument.

The trustee of the trust would be a fool not to seek input from an attorney.