When must trustee disburse assets that are left "free of trust"? When must trustee stop using trust funds to modify assets?

There isn't any hard date or deadline for when the trustee must comply with the terms of the trust and distribute the assets, either in "cash" or "in kind." "In kind" would be a distribution of the real property without selling it and distributing it to the beneficiaries as tenants-in-common. Nevertheless, the trustee does have a duty to comply with the terms of the trust and act in a reasonable manner. If the trustee is failing to distribute the assets without reasonable justification, a petition for an account and demand for distribution can be filed in the probate court. If the court finds that the trustee failed to distribute the assets in a timely manner, there is case law providing that the objecting beneficiary is entitled to attorneys fees and costs. The trustee also has a duty to make trust assets productive and to avoid waste. Unless there is substantial justification for the trustee making major improvements to the property before selling it, he or she is taking a very risky approach and it can be addressed either by a petition seeking to prohibit the trustee from doing so or as part of an objection to an account after the improvements have been made. In my experience, investing substantial assets in renovating the property rarely equates to a higher selling price justifying the trustee's actions.

There would not seem to be justification in making improvements to the real estate based on your limited facts. But there may be circumstances when improvement would be warranted say where it is necessary to sell the property where it has not been kept in good shape. The trustee is the one that makes calls here not the beneficiary. However, they better exercise sound judgment as the beneficiaries can bring an action against such trustee for waste or mismanagement. You really need to take the trust to an estates attorney to discuss the situation and to map out a strategy to deal with these problems. Do not do this on your own. In extreme cases you can bring an action for the trustee's removal. Your estates attorney could bring an action for removal for cause of the trustee if warranted. For removal for cause, please see my article entitled Pennsylvania Probate: Removal of Personal Representative Under PA Estates and Fiduciary Code at the following link: http://www.sjfpc.com/Probate_Removal_Executor_Trustee_PA_Probate_law.html Even though this relates to PA law most states have similar rules. Discuss this with your estates attorney. Hope this helps. Please remember to designate a best answer to your question. Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is [email protected] , his website is www.sjfpc.com. and his blog is

As stated, its a reasonable standard. That said, the Trustee is not in an eviable position and is making it worse by doing what he/whe wants. That will leave him/her to being second guessed. The problem you potentially face is the dilema faced by many beneficiaries - there is a difference in having rights and enforcing rights. If the trustee is expending nominal funds, it may be hard to take action. If the funds are excessive, that may be a basis for going after the trustee on breach of trust. Look at Probate Code Sections 16000 et. seq. for the trustee's duties. He/she may be breaching several of those, all of which would be grounds for removal. If there truly is no reasoning to continue holding the assets, you could do a Petition to Compel distribution of the trust. If you are not getting information on the use of trust funds, you should ask for an account in writing and then file a Petition for an Account if you have to. Those fall under Probate Code Section 17200 et. seq. Failure to account and failure to advise beneficiaries of the trust and administration are also breaches warrenting removal. See Probate Code Section 16060 et. seq.