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Ely
Ely, Lawyer
Category: US Law
Satisfied Customers: 102597
Experience:  Counselor at Law. Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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Hello. How would I go about purchasing a house which is currently

Resolved Question:

Hello. How would I go about purchasing a house which is currently owned by a trust which I control in California? In effect, I want the trust to give me a mortgage at the current market rate and period of time. Thank you.
Submitted: 3 years ago.
Category: US Law
Expert:  Ely replied 3 years ago.
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my reply.

Are you both the beneficiary AND the trustee?
Customer: replied 3 years ago.

No, I am not the beneficiary. It is a special needs trust setup for my cousin and I am the sole trustee. The problem is that the trust is going to run out of money shortly and will no longer be able afford the upkeep of the house. I do not want to have to sell the house (which is owned by the trust and lived in by my cousin). The thinking is for me to purchase the property and let my cousin live there. My monthly payments would go to the trust and pay the bills.

Expert:  Ely replied 3 years ago.
Lee,

Okay, thank you.

1) Does the trust instrument (document) allow you to purchase the property, or not sure?

2) Is the beneficiary (cousin) in agreement with this?

3) Are you literally asking a step-by-step, or simply IF and HOW you can do this?
Customer: replied 3 years ago.

1. The trust document allows me to sell the property, mortgage it etc. It does not specifically allow me to purchase it nor does is state that I can not purchase it myself.


 


2. Unfortunately, he is in no fit state of mind to even understand it.


 


3. A step-by-step would be greatly appreciated.


 


Thank you.

Expert:  Ely replied 3 years ago.
Lee,

Apologies for all the questions.

If he is mentally incompetent, does anyone have lawful GUARDIANSHIP over him under a court order? If so, who - you?
Customer: replied 3 years ago.

No, unfortunately he does not have a guardian. We just attempted an LPS conservatorship but were not successful. The thinking today appears to be to let them get on with their lives until they either badly hurt themselves or someone else.

Expert:  Ely replied 3 years ago.
Lee,

Okay, thank you. Apologies in advance for the momentary wait as I am typing this out...
Customer: replied 3 years ago.

Sure, no problem .... btw, this is why the trust is running out of money. Not only do I have to employ two women to take care of him but I now have to also employ someone to act as a bodyguard to go with them each time, as he can be violent sometimes now.

Expert:  Ely replied 3 years ago.
Lee,

Thank you.

The trustee can do whatever the trust allows. So if the trust allows a sale of the property, then this can happen. If the trust allows the sale of a property to the trustee, then no problem.

The issue here is that he technically has to SIGN OFF on any such sale. But, if the beneficiary does not have an understanding of the contract, then their signature is invalid. People v. Lara, 432 P. 2d 202 - Cal: Supreme Court 1967 (general discussion).

Now, the signature is PRESUMED valid until challenged/proven in court as not. If no one is going to challenge it, then it should not be an issue, but TECHNICALLY someone who is COURT-ORDERED as the GUARDIAN for him should then sign off.

Now, the actual purchase of a property is quite simple. All one has to do is to transfer a DEED from the TRUST (seller) to the TRUSTEE (buyer). The problem here is that when there is a trust involved, there is a lot more paperwork. So one WILL NEED counsel here. It is virtually impossible to do this otherwise, especially from abroad.

May I recommend the CA Bar referral program - here. The attorneys are vetted and qualified. You should be able to find an attorney you are confident with and whom you can trust, and who is available ASAP.

Good luck.

Please note: I aim to give you genuine information and not necessarily to tell you only what you wish to hear. Please, rate me on the quality of my information and do not punish me for my honesty. I understand that hearing things less than optimal is not easy, and I empathize.

Gentle Reminder: Please, use the reply button to keep chatting, or rate positively and submit your rating when we are finished. You may always ask follow ups at no charge after rating.
Ely and other US Law Specialists are ready to help you
Customer: replied 3 years ago.

Thank you. If the trust totally owns the house, why would he need to sign off the sale? Another house which was in the same trust was previously sold in order to pay his medical bills and did not require his signature nor consent in any way.

Expert:  Ely replied 3 years ago.
Lee,

If the trust totally owns the house, why would he need to sign off the sale?

Because as a beneficiary, he has an interest in it and must sign away his right to it. Failure to do so would may provide a "clean title" which may make the sale of the property later on impossible.

Another house which was in the same trust was previously sold in order to pay his medical bills and did not require his signature nor consent in any way.

With all due respect, this was likely an oversight. A careful third-party buyer may order a title history and then be hesitant to purchase unless all parties of possible interest had signed off on the sale.

I am possibly being overly cautious, but I am willing to bet the attorney you speak with via referral will echo these concerns.

Gentle Reminder: Please, use the reply button to keep chatting, or rate positively and submit your rating when we are finished. You may always ask follow ups at no charge after rating.