Now That I Am Managing My Mom’s Assets as Trustee of Her Trust in California, What Do I Do About Her Family House that Now Is Vacant? (Part 1 of 2)

This issue often arises in California in many different contexts including:

1. When acting as trustee of someone’s trust;
2. When acting as conservator regarding the conservatorship court proceeding of someone who cannot take care of herself anymore; and
3. When acting as the administrator or executor of the probate decedent’s estate court proceeding of someone who is deceased.

This is the vacant home dilemma. It can get you into trouble if you’re not careful. It arises all the time, and most often in the context of a trust. So we’ll concentrate on the trust context here.

This is the first post of a 2-part post series. In this post we will provide you with rules and information. In the second post we’ll demonstrate how those rules apply to a set of real-world facts.

What Duties Does a Trustee Have to Rent or Sell the Vacant Family House?

The trustee of a trust is the person in charge of carrying out the trust terms. He has a duty to preserve property of the trust estate (or the trust assets and finances). He also has a duty to make that property productive. The trustee may hold a reasonable amount of funds necessary to pay trust estate obligations and other obligations. Otherwise, the trustee must hold all trust assets in a way that is safe and that also generates income, dividends, and/or increases the value of the assets, as a reasonably prudent investor would do.

The real property of the trust estate cannot remain vacant and unrented for a sustained period of time. Rather, it must be rented, or it must be sold and the net sale proceeds invested. Otherwise, the trustee may be violating his trustee duty to make trust estate property productive.

Also the trustee of a trust has a duty to treat all trust beneficiaries impartially. The trustee must act impartially with respect to investing and managing trust estate assets, accounting for any differing interests of the beneficiaries. The trustee cannot allow 1 trust beneficiary to live in trust real estate rent-free to the exclusion of other trust beneficiaries.

All of this seems to make sense for most people regarding assets other than the family house. For some reason, people often fail to realize that these rules also apply to the family house. Perhaps they don’t think of the family house as something to use to generate income because Mom and Dad (and all of the children) lived in it for so long without paying rent.

How Would the Court Know that the Family House Is Vacant?

No trust police exist in California. Generally no government agents are randomly investigating trusts to ensure that the trustees are keeping the trust property productive.

But family members and others close to the situation may be paying attention. At some point, one of them may bring this issue to the court’s attention.

How Do I Know How Much Time Is Too Much Time for Keeping the Family House Vacant?

There is no bright line rule about how much time is too much time. It depends on the unique factors of each case. Court’s consider this issue on a case-by-case basis.

Allowing the family house to remain vacant and unrented for 36 months is likely too long. 6 to 12 months is less risky.

Get Help from an Experienced Trusts and Estates Attorney

The vacant house dilemma is only 1 of many things that can get the trustee of a trust, the conservator of a conservatorship court proceeding, and the administrator or executor of a probate decedent’s estate court proceeding into trouble. Don’t risk personal liability by making this type of mistake.

Hiring an attorney experienced with trusts, conservatorship court proceedings, and probate decedent’s estate court proceedings can keep you out of trouble.

At Meinzer Law Firm, P.C., we have over 20 years of experience helping clients achieve their goals in trust cases, conservatorship court proceedings, and probate decedent’s estate court proceedings. Contact Meinzer Law Firm, P.C., in Torrance to assist you.

The next post will demonstrate how these rules apply to a set of real-world facts.