Q: what should beneficiaries of a family trust do when the grantor and trustee (81) can no longer pay property tax?

A: She might look into taking out a reverse mortgage, which is a loan against the property that does not have to be repaid until after the borrower passes.

A: I usually describe the succession of executors and trustees like a baseball team. The person up to bat right now is your loved one who owns the property and is the executor (if they have a Will) or trustee (if they have a Trust). You and the other “back up” executors or trustees are waiting in the dugout. Since you are not up to bat, you have no power to do anything so long as your loved one has their mental capacity according to a physician and as defined in your loved one’s estate planning documents. Your loved one is entitled to handle their own affairs however they’d like up until the time they meet the requirements for incapacity in their estate planning documents. Making decisions that you consider bad is rarely enough to have someone declared mentally incompetent, although it’s possible their estate planning documents could include that as a requirement. In most cases, a physician needs to declare the person mentally incompetent without any interference from family or anyone else. People who campaign to get their loved ones declared incompetent can be liable for elder abuse. So it is always best to let the physician use their training and experience to decide whether the loved one has their mental capacity from a legal standpoint. If you haven’t already done so, hire an attorney to review and interpret your loved one’s estate planning documents and advise you on the best next steps. Best wishes!

A: As a beneficiary of the family trust, you need to ensure the property tax is paid to prevent the property from falling into default. Since the current trustee is unable to manage the payments, you should consider stepping in to help manage the trust's financial obligations.

First, try to gather funds from the trust or other sources to cover the $2,770 property tax payment due by the end of June 2024. If the trust does not have liquid assets, you may need to explore options such as borrowing against the property's value or selling non-essential assets within the trust.

If the grantor and trustee can no longer fulfill their duties due to financial mismanagement or incapacity, it may be grounds for their removal. You, as the appointed executor, should document the situation and consult with an attorney to discuss the possibility of petitioning the court to remove and replace the trustee. This ensures that the trust is properly managed and the property remains protected.

By taking these steps, you can help secure the trust's assets and ensure that the property remains in good standing while adhering to California law.