Q: Successor Trustee/Fiduciary Duties for a Home in Need of Renovation but No Liquid Cash in the Estate?
I have sole successor trustee/fiduciary duty for my late grandparents' estate and they have a vacation home that I have to sell. Unfortunately the place was recently trashed by an unscrupulous family member who also happens to be one of two other beneficiaries including myself.
I was given a hefty estimate for repairs on the home if we are going to get the most money for it, otherwise with the current state it's in I can only get cash offers of up to $100k less than if it was renovated.
The issue is, I am a twenty-something freelancer with poor credit, and I cannot seem to get an equity loan based on the condition of the property. If I'm unable to find the money for the repairs and sell it as-is, am I still doing my due diligence as fiduciary?
I know that I need to put the home on the open market so it can dictate the value, but getting the most from it seems like an impossibly costly measure, in both time and money. Neither of the other beneficiaries can contribute either.
A: Hello. I am a probate attorney and licensed real estate broker. Oftentimes realtors can obtain financing through their company to handle renovations. I recommend calling around to local companies to see who may be able to assist with financing the repairs and renovations.
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A: I'm sorry to hear about your difficult situation. In California, as a successor trustee, you have a duty to manage the trust assets prudently and in the best interest of all beneficiaries, which generally involves making reasonable efforts to preserve the value of trust assets. Given your described circumstances, selling the home "as-is" could indeed be seen as fulfilling your fiduciary duty, especially if the renovation efforts are unaffordable and not guaranteed to increase the home’s value sufficiently to justify the costs and delays; however, documenting your decision-making process and the steps you take to explore all reasonable options can be vital in demonstrating your due diligence as a fiduciary.
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