What if living trust beneficiaries can't agree on what to do with the property?

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Question:

Can you do anything ahead of time to solve a disagreement between the beneficiaries on what to do with real estate left to them in a living trust? Can the successor trustee make the decision on what to do with the property?

Answer:

It sounds like you're talking about the unpleasantness that so often crops up among people who find themselves co-owning a piece of real estate. Some may want to sell; others want to hang on to the property; some want to scratch out the eyes of the others who do not agree with them. This can be -- and too often is -- a problem whether survivors come into the property through a trust or a will.

The trust document could direct the successor trustee to sell the property and divide the proceeds instead of transferring the property to the survivors. But if the trust doesn't direct this specifically, the beneficiaries will have to hash it out. If all else fails, any of them can go to court and ask for a partition -- a judicial division of the property.

The time to help the future beneficiaries make nice is now, while you're still around to put some gentle pressure on them. If they don't behave, you can always leave the property to charity, after all.

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