There are times when people want their home kept in the family forever. Can Trust beneficiaries keep the home for mutual use instead of selling it? The Trustee and Beneficiaries must first check the terms of the Trust document. If there are no restrictions stated in the Trust pertaining to selling the home, the Trustee can sell the property. The Trust would have to specifically state a restriction that the home should remain in Trust. Otherwise, there is no way to block the sale of the home.
What stops a trustee from selling a property?
If the Trust specifically states the home will be held as Trust property, problems can arise. If the beneficiaries are bickering over usage of the home or whether it is going to be rented out, these problems can lead to lawsuit. If keeping the house for the use of multiple beneficiaries is not working, the Trustee can either try to negotiate usage among the beneficiaries, go to court to force the sale of the home, or negotiate a buyout with one beneficiary (or several beneficiaries combined) keeping the house.
Another problem that can arise when a property is held in Trust is that the home may need to be sold prior to the parent’s death to pay for the parent’s care. If the Trust terms state the home cannot be sold, it would be difficult for the Trustee to sell the home to pay for care. The Trustee would have to go to court to obtain approval of the sale which could be costly.
The moral of the story: keeping a home in the family Trust does not always go according to plan. A more flexible plan is usually the better way to go.