Termination Of The Trust

Specific time period of the trust

Each of the trusts are set to run for a specific period of time.

Most trusts are set up for a period of 5 years. There is nothing magical about 5 years. It just seems to be the number that most Sellers and Buyers agree to.

Trust can be set up to run for any time frame from 2 years or more.

Beneficiary 2 Can Terminate the Trust At Any Time Prior To the Original Termination Date

One of the rights that Beneficiary 2 has is terminate the trust at any time from day 1 until 6 months prior to the termination date of the trust. They simply have to purchase the property from the trust at its then fair market value.

6 months prior to the termination of the trust is a big day

As this date approaches the Trustee will send a notice to Beneficiary 2 that he needs to know their intent to purchase the property or give up their rights to purchase.

What happens if Beneficiary 2 gives up their right to purchase the property from the trust

In that case the original seller / Beneficiary 1 will be given a 10-day right to purchase the property from the trust for its then fair market value.

what happens if neither the seller or buyer wish to PURCHASE the property from the trust

In the event that neither of the Beneficiaries want to purchase the property from the trust the Trustee will have the property listed by a local agent and the property will be sold to the public at large.

During that final 6 months of the trust when neither Beneficiary wants to purchase the property Beneficiary 2 / Tenant is required to continue making payments and perform all require maintenance while the property is placed on the market and a new buyer is being sought.

They must cooperate with the Listing Agent on the property and allow for ALL showings of interested parties.

follow the link to see the order of distribution

order of distribution

Trust Solutions