Q: The trust terms: divide the home equally one third each. Can my trustee sister demand I pay the entire existing mortgage
My two sisters and I have agreed I will buy their interest in the home. My sister who is the trustee demands I pay the entire existing mortgage or she will not sign the deed. The trust terms are the home is divided equally one third each. Can my sister alter the terms, threaten to not sign the deed if I don't pay the existing mortgage?
A: There are private investors who provide liquidity to estates for exactly this situation. They provide funding to allay your Sister's apprehension, and should also provide guidance in preserving the historical property tax.
Jonathan Purcell is a California Attorney. This posting does not create any attorney-client relationship. The information presented here is general in nature and is not intended nor should be construed as legal advice for any particular case or client. For specific advice about your particular situation, please consult with your own attorney. This posting is not intended to constitute an advertisement or a solicitation
A: The beneficiary of a trust is entitled to be paid in cash or in kind. If you want the property, you will need to find a way to pay your sisters in cash. You can assume the mortgage on the house so that your equity equals the amount of cash given to each of your sisters, and that’s one way to settle the estate. Your sister really shouldn’t demand that you refinance the debt if you want the house. The debt is non recourse debt. If you fail to pay any of the monthly mortgage payments, you stand to lose the house, but the trust or your sisters are not liable for the unpaid mortgage. You can obviously refinance the debt through conventional or non conventional means, but that really shouldn’t be a condition of the gift to you. Maybe your sister believes otherwise, but properly informed, she should have no objections to your proposal.
Nina Whitehurst agrees with this answer
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