Q: The trustee is going to charge the beneficiaries for each item they take from parents home - is this legal in California

A: Dear Chino:

Here are my thoughts on the facts you describe. However, you should really speak with an attorney on this one before proceeding as administration of a trust is dependent on the language of the trust instrument and the particular facts of the administration. I provide some info on finding an attorney at the end of this post.

Standard operating procedure is for a Trustee to have an inventory and appraisal performed by a third party appraisal service as to all property in the Trust. The exception would be cash, stocks, bonds and the like. Cash, of course, is valued at face value (but not collector currency, which needs an appraisal.) Stocks, bonds, and the like are valued based on price per share as of close of market on date of death.

If beneficiaries take particular items of tangible property (stuff of life, clothing, dishes, silverware, etc.), the Trustee then includes the item's value in that beneficiary's share, making adjustments required. For example, if two beneficiaries are entitled to equal shares of the estate, and one takes $1,000 more in tangible personal property than the other, the Trustee would make an adjustment to equalize the two shares.

Tangible property left over is then sold, donated and otherwise disposed of. Any cash or tax benefit from the disposition is credited to the estate and then passed through to the heirs.

I say this is "standard operating procedure" because the formal procedure is rarely followed. Trustees usually do not perform the inventory of tangible property unless their is an resolvable disagreement between the beneficiaries. This is because the cost of performing the inventory and appraisal is generally greater than the value of the items. (Unless the estate contains items of particular value, such as fine art or jewelry.)

The normal "reality" procedure is for the Trustee to obtain the approval of the beneficiaries to waive the need for a formal, complete, inventory and appraisal. The beneficiaries select the items they wish to keep and a method for resolving disputed items. (For example, picking names out of a hat, or a rotating section. Think how you might divide several different toys between a group of children.) As before, anything left over is sold, donated, recycled or relegated to the landfill.

This assumes, of course, that the Trust does not provide for the procedure on valuing the property. And, that the tangible personal property is part of the Trust corpus. (Not all estate planning trusts include tangible property, particularly to avoid the cumbersome inventory and appraisal procedure.)

I do not see where a trust provision allowing one sibling to reside in the home for a period of years would have any bearing on the Trustee's decision on how to deal with the tangible personal property.

As beneficiaries (you did not mention if the Trustee is a beneficiary or not), you may instruct the Trustee to break with the formal procedure, and potentially any instructions in the language of the Trust itself, and relieve the Trustee of liability for following your instructions. If the Trustee will not comply, you can ask the court to order the Trustee to follow your wishes. (The court may also require the Trustee to cover your costs in doing so.)

Would be a bit concerned that their rigged compliance with the law and trust is an attempt to justify a larger fee. Particularly if the Trustee is a beneficiary and the Trust grants one beneficiary a special benefit, such as living in the decedent's home rent free for a period of time.

I cannot recommend strongly enough that you speak with an attorney regarding Trust administration, regardless of whether or not the Trustee is a beneficiary or represented by counsel. If you do not know where to find an attorney, try your local county bar association. Most provide a lawyer referral service where you get a consolation for a low or no fee.

Best of luck.

A: She is partially correct. The trust has to be read to determine what it says about the "personal property" of the parents. The house contents (furniture & furnishings) are personal property. Just because she is allowed to live in the house for 3 years does not give her the right to keep the house contents for 3 years. The personal property section of the trust would govern and typically says who gets what and when they get it.

It is normal for her to inventory and price (appraise) all the items and then charge the beneficiaries for whatever pieces they ultimately receive. The sooner the better for doing the inventory.

The beneficiaries should retain legal counsel to interpret the trust and make demands for distribution of the personal property. Also, demand should be made for an immediate list and photos and/or allow inspection by the beneficiaries to see what is there as of the date of death. Personal property is one of the largest and most annoying problems in estate/trust administration as things tend to disappear fast and beneficiaries typically have no hard evidence as to what was and was not there.