Responsibilities of a Successor Trustee

There are many benefits to using a revocable living trust as part of your estate plan. Whether you are the grantor of a trust or named as a successor trustee, an estate law attorney can help you understand what their duties may entail.

What is a Living Trust?

A living trust is a legal entity created by a grantor who puts assets into it. While the grantor is alive, they can manage the trust and add or remove assets as they wish. The grantor must name a successor trustee, who takes over management of the trust should the grantor become incapacitated or pass away. Typically, assets in a trust do not have to pass through probate. However, it’s important to seek the counsel of experienced probate attorneys to ensure a trust is set up correctly.

Duties of a Trustee

One of the most important things to keep in mind is that a trustee’s main obligation is to safeguard the trust’s assets for the benefit of its beneficiaries or the grantor, if the grantor is still alive. A successor trustee may not mix trust assets with their own or use the trust assets to their benefit, unless it is part of the terms of the trust. Each state has its own laws and rules that regulate trustees’ responsibilities.

Responsibilities of a Successor Trustee When a Grantor Passes Away

In addition to protecting the trust’s assets, the duties of a successor trustee include:

• Notifying the grantor’s family members and relatives that they are the successor trustee
• Providing all beneficiaries with copies of the declaration of trust
• Contacting the Social Security Administration, financial institutions, insurance companies, investment/retirement planning firms, and others to inform them of the grantor’s death
• Implementing the trust’s instructions
• Paying off outstanding debts and taxes or coordinating with the executor of the will to pay them
• Preparing and filing all required tax returns
• Paying the ongoing expenses of administering the trust until it is terminated
• Distributing assets to the beneficiaries of the trust
• Closing the trust once assets are distributed

When a Grantor is Incapacitated

If the grantor is Incapacitated, the successor trustee typically uses the living trust assets to provide for the grantor’s care and comfort while they are still alive. The trust instructions may also provide for the care of the grantor’s loved ones as well. Other duties include:

• Taking necessary steps to secure and protect all of the trust assets
• Notifying financial institutions and banks to obtain access to any accounts in the trust
• Applying for disability benefits for which the grantor may be eligible
• If the grantor has different agents for financial and health care powers of attorney, coordinating with them to take care of the grantor’s bills, taxes, investments, and any other financial issues, and ensuring the grantor receives the care they need
• Keeping records and receipts for any expenses and bills that have been paid, and any personal expenses incurred in the course of the trustee’s duties

How an Attorney Can Help

Using professionals to help carry out the trust’s instructions can make managing it much easier. A wills and estate attorney can be a valuable resource and ensure the trust is properly administered. If assets in a trust are specialized, it may be a good idea to seek the advice of a lawyer who is familiar with that area of the law. For example, if a grantor includes rental properties in a trust, consulting real property lawyers can help you determine the best way to manage or sell them.

This blog was originally posted at https://carosella.com/blog/responsibilities-of-a-successor-trustee/

Common Contingencies and Disclosures in Real Estate Sales Agreements

Disclosures and contingencies in sales contracts enable both parties to back out of a real estate deal if certain conditions are not met. Understanding how they work can help make the process easier and give you an opportunity to take a deep dive into the status and condition of a property.

What Does a Contingency Mean in Real Estate?

A contingency is a clause in a real estate purchase agreement that specifies a requirement or action that must be met to make the contract legally binding.  Contingencies protect both parties’ interests. Before a real estate contract becomes binding, both the buyer and seller must agree to the terms of each contingency and sign the contract. It is critical to have an experienced real estate attorney draft or review a sales agreement, especially if you are new to buying or selling real estate. Some contingencies can be challenging to understand – your lawyer can explain them in terms that are easy to grasp and advise you on whether certain contingencies may or may not benefit you.

Common Contingencies

Many different types of contingency clauses may be added to a real estate contract. Some of the most common include:

Mortgage contingency – This clause outlines the period of time in which the buyer must find financing to purchase a property. If a loan is not secured by this deadline, either party can nix the deal without consequence and the seller can put the property back on the market.

Title contingency – This clause allows the purchaser to do a title search and object to the title status of the property. If there are any liens or issues with the title, the buyer can renege on the deal.

Home inspection contingency – This gives the buyer a window of time to get the property inspected by a professional. Foregoing an inspection contingency is not recommended by real estate contract lawyers, as the inspection helps reveal any serious issues such as faulty plumbing, structural problems, or a leaky roof. If the property does have defects and the seller chooses not to repair or remediate the problems, the buyer can terminate the contract.

Prior home sale contingency – This clause benefits buyers who need cash from the sale of an existing home to buy a new one.  If they need to sell their home by the deadline specified in the contract but do not have a buyer, the contract can be terminated without penalty.

Appraisal contingency – This stipulation protects the buyer. If the property is not appraised for the sales price, the contract can be nullified. In most cases, the seller can drop the price to the appraised value if the buyer is still interested.

Insurance contingency – Often requested by the buyer or mortgage company, this contingency stipulates that the buyer must obtain homeowners insurance on the property. If they are unable to get insurance, either party can withdraw from the contract.

What is a Disclosure?

Most Pennsylvania real estate lawyers have clients who are selling property fill out a Seller’s Disclosure Form, which contains all the information about the home’s condition, defects, potential repairs, or any other issues that could affect the buyer’s decision.

If you need assistance with buying or selling property, our full-service law firm is here for you. In addition to handling real estate deals, our local lawyers for wills, estate planning lawyers, and living trusts lawyers can help you safeguard your assets and your loved ones’ interests.

This blog was originally posted at https://carosella.com/blog/common-contingencies-and-disclosures-in-real-estate-sales-agreements/