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Do You Know Your Duties and Liabilities as a Trustee of a Home in a Trust?

Have you ever handled a home in a trust? Property in a trust can bring specific concerns and issues: How do you deal with a non-cooperative owner? What are your duties as a trustee? What specific liabilities come with that role?

A CRES client is a trustee with two homes in a trust. A family member lives in one of the homes and is a beneficiary. She needs a lot of care and doesn’t want repairs done on the trust home. That left the trustee wondering what to do, so he called CRES ClaimPrevent® Legal Services for guidance.

3 Things a Trustee of a Home in a Trust Must Do

One of our ClaimPrevent® attorneys advised the trustee that California law requires that the trustee do these three things:

  • Maintain the property in good order
  • Keep insurance updated
  • Send quarterly status letters to the beneficiary

The trustee should maintain records of upkeep, insurance, and the quarterly letters in his files. In addition, there should be a trust account that names him as a trustee for the trust.

State laws can vary as to what’s required of a trustee, so be sure to check the requirements in your state.

Additional Steps Related to Representing a Home in a Trust

In this case, the trustee had some confusion about the trust itself, which was created by a paralegal, and he wanted more clarity. That’s beyond the scope of CRES ClaimPrevent® Legal Services, so the attorney suggested that the trustee retain a lawyer to draft an opinion letter to clarify the trust and the duties of the trustee.

The trustee had information to act on immediately and understood next steps to make sure he was living up to trustee duties and protecting himself.

Get Advice on Your Legal Questions

Do you have a question about a home in a trust or another legal issue keeping you up at night? It sure helps to have someone on hand to answer your legal questions. If you’re a CRES real estate Errors and Omissions insurance member, you can call CRES ClaimPrevent® Legal Services 7 days a week for free expert legal advice.

CRES Members receive a prompt response from an experienced attorney—within 4 hours or the next business day. Plus, our legal services confirm recommendations in writing. This is just one of the ways we help clients prevent claims!.

Can we help you with your real estate E&O policy?

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