The Power to Sell Your Property
A trust document should always include a section defining the powers of the trustee. While you are serving as trustee, you typically want the document to give you the power to change the trust document, revoke the trust document, and to manage the property in the same fashion in which you could have managed the property when it was in your individual name. However, you need to decide what powers you are going to give your successor trustee when you are gone.
Defining the Trustee's Power
Typically, you do not want the successor trustee to be able to change the core decisions about your plan. Therefore, you should define what powers she will have regarding the management of the trust property. Your successor trustee is usually given all of the powers any property manager would have, such as the power to invest, reinvest, borrow, rent, or improve the property. Notice that these standard powers will give your successor trustee the power to sell your property.
Placing Restrictions on the Selling of Property
If you do not want one or more pieces of your trust property sold, you need to include a restriction in the trust document prohibiting the successor trustee from selling that piece of property.
It is difficult to have a trust stay in existence for very long after you are gone if the successor trustee is not given the power to sell the trust property. The economy frequently changes, and the successor trustee needs to be able to manage the property effectively during economic ups or downs.
You may not want the trustee to be prevented from selling an asset forever, but merely for a period of time. This is a common restriction used when a parent wants the trustee to keep his home until his children reach a particular age.
The Power to Sell as an Incentive
Alternatively, you may use the power to sell as an incentive to keep your beneficiaries from arguing. If your trust document directs the successor trustee to divide the trust property among your beneficiaries, you might consider including an instruction in your trust document that says if the beneficiaries do not agree on how the trust property will be divided and distributed within a certain amount of time, the trustee is instructed to sell the property and divide the proceeds. This type of instruction often serves two purposes: It motivates the beneficiaries to reach an agreement, and it prevents your beneficiaries from filing a complaint with the local probate court if they cannot agree.