Powers of the Trustee Interactions
Cynthia is
the trustee for property left in trust for her nephew, Marcus. The trust
agreement states she is can invade principal, if needed, due to unforeseen
circumstances. This is an example of
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Cynthia is
the trustee for property left in trust for her nephew, Marcus. The trust
agreement states she is pay $1,000 per month to Marcus until he turns
21. This is an example of
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Winona conveyed
her small Santa Monica, CA home to Nancy (as trustee) to hold it in trust
for and to pay the income to Yves. Although the house is right on the
beach and in good repair, it is old and does not have a modern kitchen.
As such, the house is only rentable for a very low rent. With a modern
kitchen it would be rentable for at least $1,400 per month. Nancy contracts
to have a new kitchen installed for $7,500. Afterwards, the house is rented
for $1,500 per month. Nancy should be reimbursed from the trust for this
expense.
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John is the
trustee of two rental properties held in trust for the benefit of his
niece, Carla. According to the trust agreement, the trust is to terminate
when she finishes college. At that time, the properties pass to her. The
trust has already been in effect for six years. Carla is currently 21
years old. Recently one of the units came up for renewal. The old tenant
decided to move and a new tenant is looking at the apartment. Generally,
tenants are offered a two-year lease. Standard for the area is either
a one-year or two-year lease. The new tenant plans to stay in the area
for four years while he attends a local university. To streamline the
administration of the trust, John offers the tenant a four-year lease.
The term of the lease is reasonable, given the circumstances.
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John is the
trustee of two rental properties held in trust for the benefit of his
niece, Carla. According to the trust agreement, the trust is to terminate
when she finishes college. At that time, the properties pass to her. The
trust has already been in effect for six years. Carla is currently 21
years old. Recently, a major developer offered John an attractive price
to sell the two properties. John should take the offer.
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Miguel is
the trustee for property held in trust for his sister, Emma, who is a
minor. The trust is due to terminate when she reaches age 25. Their parents
died in a car accident six months ago. Subsequently, the driver of the
other vehicle filed a wrongful death claim against the trust in the amount
of $500,000. Miguel’s attorney estimates that it will take three
to five years for the case to make its way through the courts. What should
Miguel do?
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