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If a trustee signs a lease to own agreement on property thats in a trust, is it a binding legal contract

Lancaster, MA |

the question is the property was left to someone else in trust/will, but that person died many yrs ago, so trust did a lease to own contract with the person that was now going to get property. because of the death of that person. and the trustee made out the contract to a beneficiarie of the trust

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Posted

There is no doubt in my mind that you need a local attorney to review the will --I think you refer to a testamentary trust, however, I am not certain especially since you've tagged this as "Living Trust". It is impossible to give definitive advice without reviewing the relevant documents. Best of luck to you.

Answer given for general advice and is not a legal opinion, which would require an analysis of the facts and circumstances as well as the applicable law and regulations.

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Posted

The short answer is that yes - a trustee and/or personal representative can enter into binding contracts in some cases. However, it is unclear from the description exactly what has happened. Further, just because a trustee or personal representative MAY enter into a binding contract does not mean that 1) s/he had the power to do so in this instance; and 2) that the contract was properly drafted and executed.

You should have an attorney review the documents (for free) and advise you on what, if anything, you can do. My firm certainly handles these matters, as do many attorneys you can find using the "Find a Lawyer" link above.

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2 comments

Asker

Posted

in the trust, it states the trustee has all rights to engage in any contracts,to sell,transfer,enter in any long turn leases,contracts,lease to own contracts, even if it go's beyond the trust. its a simple contract that the trust sign and a tenant both sign, stateing that at anytime the tenant exercises its option to take the premises she can, then the trust must turn over a /convey a good and marketable title/deed

Steven Kelsey Hemingway

Steven Kelsey Hemingway

Posted

From what you describe, it would appear that this is permissible. But without seeing the actual documents, no attorney is going to be able to definitively tell you whether the power and/or the contract are deficient in some way. Very small variances in the language can make a very large difference.

Posted

The answer of if a trustee is able to bind the trust is either in the Uniform Trust Code or the Trust itself. More than likely, the trustee has the authority to bind the trust. That said, your question is somewhat cryptic. I am not sure if you have a trust or a Will. If it is just a Will, without trust language, then the answer might lean more toward no, the PR doesn’t have the authority to lease. Either way, the trustee/PR needs to have the documents reviewed so that they will know what their authority/responsibility is surrounding the decedent’s wishes.

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Posted

You would need to sit down with an Estate PLanning Attorney and review all of the Estate Plan Documents. The Trust should set forth the terms as well as the powers/authority of the Trustee. Whether or not the Trustee was within its discretion to enter into such an agreement would be determined by the documents themselves and/or the Massachusetts Uniform Trust Code. Best of luck to you.

Legal disclaimer: DISCLAIMER This answer is provided for educational purposes only. By using or participating in this site you agree and understand that there is no attorney client privilege between you and the attorney responding. This site cannot be used as a substitute for competent legal advice from a licensed attorney that practices law in the State where this offense is charged and/or wherein the legal issue arises; and, who has experience in the area of law you are asking questions about and with whom you would have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question, or in the State in which your particular issue has arisen.

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Asker

Posted

ty, as to wording of trust doc's, under section, powers for Executor and Trustee is authorized in its fiduciay discrecretion ( which shall be subject to standard of reasonableness and good faith to ALL beneficiaries ) with respect to any property,real or personal,at any time held under any provision of this will and without Authorization by any court and in addition to any other rights,powers,authority and privileges granted by any other provision of this my will or by statute or general rules of law: then, it states following, to sell or dispose of or grant options to purchase any property,real or personal,constituting a part of my estate or the trust estate for cash or upon credit. to enter for Any Purpose into a lease as lessor,or lessee with or without OPTION TO PURCHASE, or renew for a term within or extending beyond the terms of the trust. i hope am reading that statement, as a contract ( lease to purchase ) was in place with trust , well before her father past. so i read it as the lease to own purchase agreement is valid. any more thoughts on that . ty

James Thomas Kinder

James Thomas Kinder

Posted

We cannot, per the terms of participation, provide legal advice here on this site. However, by highlighting the terms you did, I think you have answered your question as to whether or not, if the Trustee followed its Fiduciary duties, he had the authority under the Trust to do so. Again, whether or not the Trustee abided by or breached any fiduciary duties to the beneficiares of the Trust is fact and detail dependent. You would need to sit with a attorney to flush out all of the facts.

Asker

Posted

ty for taking the time sir,

James Thomas Kinder

James Thomas Kinder

Posted

you are very welcome.

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