So this happens from time to time where a trustee is the trustee of a trust that owns real property such as a house or a cabin or vacation home and there are beneficiaries of that trust who ultimately will inherit the VALUE of that property. And the reason I say the VALUE of that property is it’s probably not a good idea to distribute that assets, let’s say a house, out to six different beneficiaries. Because what use is it to them when it comes out to them in six different shares on title to the deed?
So the better option is to approach the beneficiaries, if you’re a trustee and ask then, “Hey guys, what would you like me to do? My proposal is that we sell the asset, liquidate it, and then I can distribute cash to each one of you and you all can move on with your life.”
Most beneficiaries are going to say, “Yes’ to that. If you get a beneficiary that says, “No.” Well, then you just petition the probate court with what we call a Petition for Instructions and ask them for an Order to approve you as the trustee settling the asset so that you can distribute the cash out to the beneficiaries.
So those are the kind of the two basic approaches to dealing with real property when it needs to go out to beneficiaries. Either get agreement from the beneficiaries, so that everyone agrees the property will come out and you want that in writing, or, if somebody doesn’t agree, you can go to court and a Judge will order it.