|What can a trustee do?
I had a trust created by your office about six years ago. I have not funded it. It is a flow-through trust which I guess means all my assets flow to the trust when I leave this world including the house that I own. My question is if I become incapacitated are my children able to sell my house if need be while I’m alive?
I didn’t really understand all the facts behind this question, but the ultimate question is worth answering and certain lessons should be learned.
First, if I set up a trust for you and tell you to fund it…then fund it!
Second, if I set up a trust for you and told you that you can fund it in the future, then that is okay. We might call this trust a “standby trust,” because it is standing by to use at a later time. I am not sure what a “flow-through” trust is in this context. We do have “pour over wills” that name a trust as beneficiary, but we only use them to pour over assets into a trust when you didn’t get around to doing it while living.
Third, if you “own” the house, then the trust does not. If the trust does not, then the trustee cannot sell it while you are living. In such a case, if you become incapacitated, then your agent under your power of attorney can sell the house.
Fourth, if the trust owns the house after your death, then the trustee can sell the house after your death. If you transfer the house into the trust today, then your trustee can sell the house at any time, subject to instructions contained within the trust.