Can a Trustee Sell Trust Property Without All Beneficiaries Approving?

Author: Cory Pinter
Date: November 28
Selling Advice
Can you sell trust property without all beneficiaries approval

This article addresses the issue of whether trustees need beneficiary sign-off to sell property during trust administration.

We will examine the complexities of trustee power, looking at legal factors, trust details, and situations that permit or prohibit a sale.

Keep reading to learn the answer.

Can a Trustee Sell Trust Property Without All Beneficiaries Approving?

When someone dies leaving assets in a trust, the person they named trustee will step in to assume control of what’s contained in that legal arrangement.

With that responsibility comes the authority to make critical decisions about those assets, including whether to liquidate property.

However, a trustee’s authority is not absolute. So, in answering whether they can sell a property when some beneficiaries disagree, the answer is generally yes, with key points to consider.

Scope of the Trustee’s Authority

The trust document dictates the trustee’s authority, which can fall into one of the categories listed below. The trustee is bound by what it says about how broad their discretion is to sell.

  • Expressly Granted Authority: In this instance, the trust instructions clearly define and grant the trustee permission and power to sell property. So, they are typically free to do so without beneficiary approval.
  • Inferred Authority: Even if the power to sell property isn’t clearly stated, a trustee can often proceed if it’s necessary, such as selling property to pay taxes or other debts.
  • Limited Authority: Some trusts restrict the sale of specific assets, such as family homes. For example, the trustee may need heir or court consent before selling your deceased parents’ house.

State laws also impact a trustee’s authorization to sell property.

All states have laws that apply specifically to trusts. Many have adopted a standardized set of laws called the Uniform Trust Code. Others have set their own rules.

Generally, most do not heavily restrict a trustee’s power to sell trust assets. But that doesn’t mean there aren’t limitations and additional requirements in some instances.

As an example, if the property was not correctly transferred (titled) to the trust, many states will require it to go through probate. That’s because it would be considered a part of the estate.

What happens when you sell a house you inherited differs when it goes through probate versus a trust.

Selling a home during probate requires court involvement, and the trustee needs to follow a specific procedure.

Trustee’s Fiduciary Responsibility

A trustee’s legal obligation to act in good faith for someone else’s benefit is also a condition for selling without unanimous beneficiary permission.

For instance, if you inherited your parents’ house, the trustee may be empowered to sell it without your approval and that of any co-heirs if the trust document allows it.

However, while the trust grants that permission, they can proceed with selling the house only if their actions benefit beneficiaries.

So, the trustee must balance their trust-derived and legal authority with their fiduciary responsibilities when considering if you should sell your inherited house.

What do these include? Trustees commonly have the following duties:

  • Loyalty

A trustee must act solely in the interest of the beneficiaries. In other words, they must exclude their personal interests when deciding to sell property.

  • Impartiality

All beneficiaries must be treated without bias or favoritism. That requires trustees to balance competing interests without sacrificing one beneficiary’s interest for another.

  • Prudence

Decisions must reflect good judgment. For example, the trustee may sell if you inherited a house that needs work, and repair costs outweigh the benefits of keeping it.

  • Transparency

Trustees should keep beneficiaries informed of all matters related to the sale — rationale, process, terms, and how proceeds will be distributed or used.

  • Accountability

This duty requires a trustee to keep accurate, detailed records of the sales transaction and be answerable for related actions and decisions.

When a Trustee Can Sell Without All in Favor

Here are situations where trustees can typically proceed without unanimous approval, given the trust grants them power and they comply with fiduciary duties.

  • To Settle Trust Obligations

In this case, the trust doesn’t have enough cash or other liquid assets to pay outstanding debts or administrative fees.

  • A Court Authorizes the Sale

Trustees can get court approval to bypass unanimous consent for a sale to divide proceeds when there’s a beneficiary dispute over the use or distribution of property.

  • To Protect Trust Value

The trustee may sell the property if keeping it would cause a major loss to the financial value of the trust.

  • To Capitalize on Favorable Market Conditions

A trustee could justify selling to take advantage of market conditions that can maximize the asset value.

  • Property is at Risk

If facing foreclosure, a person can sell inherited property to prevent loss of the asset.

When a Trustee Needs All Beneficiaries to Agree

Situations where trustees need beneficiary approval to sell trust property include the following:

  • Trust Agreement Restrictions

If the trust terms explicitly forbid selling property unless every beneficiary says “yes”, that approval is a must.

  • Court Order or State Law Requirement

The trustee must comply if trust law or a court says full beneficiary accord is necessary.

  • Specific Bequests

When a specific property is designated to multiple beneficiaries, a trustee’s ability to sell it depends on those heirs’ agreeing.

  • Risk of Fiduciary Duty Breach

When selling a property below market value or in another manner viewed as detrimental to beneficiaries, the trustee may need unanimous permission to prevent legal actions.

  • Life Estate

If the trust grants one or more beneficiaries the right to occupy the property for their lifetime, the trustee can’t sell it without consent from all the life tenants.

What Is the Easiest Way to Sell an Inherited Property?

Companies that buy houses for cash help you divest yourself of inherited property while reaping several desirable benefits.

If you’re looking to sell your inherited house fast and avoid the time and potential hassles of traditional sales, these cash buyers make the process easy with:

  • Quick Liquidity: Because it’s a cash transaction, there’s no waiting for mortgage loan approval. No need to deal with inspectors and appraisers. No need to start all over with another buyer because the previous one has been denied a mortgage.
  • Closing Cost Savings: These companies often cover all closing costs, allowing you to keep more of the sale proceeds.
  • Few or No Repairs: The property can be in any shape, which is ideal if you’ve inherited a hoarder house and have no time or desire to do a cleanout.
  • Zero Commission Sales: No real estate agents are involved, so you don’t have to worry about covering a sales commission.
  • A Straightforward Transaction: Minimal paperwork and cash payment let you close quickly and efficiently.

Selling an inherited house as is, after repairs, or move-in ready? You can move forward quickly and with less stress with cash buyers.

Get a cash offer today from companies in your area evaluated and approved by our website. Then, weigh your choices and pick the offer that works best for you.

Want to explore other approaches to the sale? Look over our article on various methods for selling an inherited house.

Cory Pinter

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About the Author

Cory Pinter is a seasoned real estate investor with a proven track record of closing hundreds of transactions. Since 2018, he has specialized in inherited properties, providing invaluable guidance and support to individuals managing inherited real estate. Cory's comprehensive knowledge of the real estate market, combined with his empathetic...

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