How to sell an inherited asset without dividing the proceeds?
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How to sell an inherited asset without dividing the proceeds?
My husband and 1 of his brothers are co-trustees of a special needs trust for their sister. The trust stipulates that upon her death, all assets in the trust are to be divided equally among the brothers (there are a total of 3). The only asset remaining in the trust is a lift van. The co-trustee has the original title to the van and we are in possession of a duplicate from the TX DMV. Last year the co-trustee transferred all other assets (cash) out of the trust due to a dispute over asset management and refuses to account for the transfer. My husband and the third brother (not a trustee) do not wish to pursue that matter. However, my husband intends to sell the lift van after his sister’s death and divide the money only with the third brother. We have every reason to believe that the co-trustee will sell it and not divide the proceeds. How can my husband accomplish this sell legally and quickly? The vehicle is in TX, where we reside. The co-trustee resides in NM. My husband will have immediate access to the vehicle. Can he sell the van to a family member (me or my father) in order to quickly get the registration, and therefore the co-trustee’s authority, out of the trust? This would also create a bill of sale for a minimal amount, which would avoid paying the full amount to the co-trustee as his share. We understand that TX will require sales tax on the BBV of the van.
Asked on October 12, 2011 under Estate Planning, Texas
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
There is a whole lot going on here. And while I understand that there may be an underlying reason to sell the van and split the proceeds only 2 ways, your husband would be violating his duties under the trust - which is a fiduciary duty - and that is a serious issue. So is what the other brother did as co-trustee and I think that your husband has a fiduciary obligation here to go after his brother not for their own benefit but for the benefit of their sister. He really can not just refuse topursue the matter. He has a legal obligation to pursue the matter. No attorney can advise you to violate your duty under the trust and how to transfer the van legally - because it would not be legal. Please, seek help in straightening this out. Good luck.
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