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socrateaser, Attorney
Category: Estate Law
Satisfied Customers: 36197
Experience:  Retired (mostly)
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A residuary Trust question

Customer Question

A residuary trust is set up in properties in 3 undivided interests. The executor supposedly signs away her and her deceased husbands 2 interests to a 3rd party for nothing. The executor that did that than passes away. Now does that dissolve this trust because the people this executor supposedly gave this property to went ahead and put their part in a family trust of their own? Can you do that in Texas without the knowledge of the remaing 1/3 interest party and upon the demise of the executor. Wouldn't the remaining family member in the trust become the executor or who can actually dissolve a trust?
One of the many questions concerning this whole deal is there are apparently Pipeline and highway row leases involved this lady was told nothing about by the other interests. It would seem to me to be a possibility that this trust is still active and this lady should have been the manager of or at least known of all this and has a claim. So diificult in Texas to fiight these things.
Submitted: 6 years ago.
Category: Estate Law
Expert:  socrateaser replied 6 years ago.

A beneficiary can devise his or her interest in an existing trust, and if the trust terms permit the distribution to the beneficiary, then that would also permit distribution to the third party.


The trust would continue to exist, however, until such time as the remaining beneficiary's interest was distributed, and the executor would remain as executor.


socrateaser, Attorney
Category: Estate Law
Satisfied Customers: 36197
Experience: Retired (mostly)
socrateaser and 5 other Estate Law Specialists are ready to help you
Customer: replied 6 years ago.
Well couple unanswered points: Can this "trust' property be put in another families "trust' without the first trust being dissolved? I mean legally speaking as we are looking for handles.(In your opinion).

Also on he leases" would not money gathered from said leases have to be distributed evenly amoung trustees? thanks for your help and time.
Expert:  socrateaser replied 6 years ago.

"Trust" property can't be removed to someone else's estate. The beneficiary's interest in the property can be distributed, if the trust instrument permits the distribution, and the future vested right to any income and/or principal can be granted to another person's estate.


Example: Trust contains a residential condo. Trust states that three beneficiaries are tenants in common and entitled to distribution. Trustee can grant a deed to each beneficiary for their respective interests, and that deed can be transferred to a third party.


Third party's interest is not clear, because either the trust still has an interest for the other beneficiary which hasn't be distributed, or the other beneficiary has been issued a deed for his/her interest. If the trustee failed to issue the deed to all three tenants in common, then the third tenant in common could sue to force the transfer. Note, that if the third party were to move into the condo and assert sole ownership for a long enough time, that party could obtain the entire property by "adverse possession."


It seems to me that the resolution of this problem is to demand equal distribution of the 1/3rd interest in the trust, and if the exector refuses, then sue to force the distribution.


And, if the trust insrument did not provide for any distribution yet, then sue the third party to return the property interests to the trust, because the beneficiary had no right to the property and the executor no authority to distribute it. You could also sue the executor for breach of trust.


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