General Responsibilities and Authority of Trustees Self-Quiz
Alice is the
trustee for property held in trust for her late sister’s children.
The primary asset of the trust estate is $100,000 received from an insurance
policy. Due to her hectic schedule, when Alice received the funds she
deposited the money (temporarily) in her money market account. For six
months, she paid the kids’ expenses from her checking account. What
did Alice fail to do?
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Jennifer’s
will leaves her property (including the family residence) in trust for
her children. Her brother, Matthew, is the trustee. Since she wants her
children to get the home after the trust terminates, she includes a provision
in the trust agreement that forbids the trustee from selling the property.
Since the real estate market was heating up, Matthew told the beneficiaries
that he was selling the residence. He realized a healthy profit from the
sale. Matthew’s action was permitted.
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Julie’s
will leaves her property in trust for her daughter, Pamela. She picked
a major bank as the trustee. One of the assets in the trust estate is
a rental property located in a Detroit suburb. The trust agreement contained
a provision authorizing the trustee to sell any property, when appropriate.
Pamela is a real estate executive and she wanted the trustee to sell the
building, since she felt the market was at its peak. The trustee refused
to sell the property. Subsequently, the building depreciated to half its
value from a year ago. At that time, the bank bought the building so it
could expand one of its branches. Pamela sues the bank. What will the
court likely due?
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