Q: Can an executor of a trust allow a beneficiary to live in one of the trust properties rent free indefinitely?
3 beneficiaries. 5 homes to be sold. One beneficiary has been living in one of the homes for years. He wants to stay in it and have it not sold by trust. But rent free. How do we make this fair to the other 2 beneficiaries? He wants us to wait on selling it for a few years. Shouldn't he have to buy the home from his portion of trust? Or should we just sign a waiver allowing him to stay there and wait to sell it?
A: A trust does not have an executor so you must be referring to a trustee. If the trust document called for outright distribution of the home to the beneficiaries then normally the trustee's only involvement is deeding the property to the beneficiaries if the house did not need to be sold to pay debts. If the trust requires the property to continue to be held in trust then refer to the trust document for answers to your questions.
A: Typically no, the trustee should be collecting rent. A trustee has a fiduciary duty that is owed to all beneficiaries. If all beneficiaries have an interest in all property held in the trust, then rent should be collected at fair market value or the property sold within a reasonable amount of time. Of course, this also all depends on the terms of the trust.
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