All Forum Posts by: Ryan Fox

@Lynnette E.- That's an interesting setup.  My colleague's family is too dysfunctional for something like this to work, unfortunately.  

Adding to the above, I would also look at how long it takes them to market the property once a tenant moves out.  

@Lynnette E.- Thanks for the suggestion.  Is the trust set up so trustees are only family members, or is there an independent trustee?  This is a very interesting topic, as you don't want your children to lose motivation by being beneficiaries of the trust, and yet you want them to make good financial decisions with the trust assets, or income they receive from the trust assets.  

My colleague's trust will last 365 years because it is a Nevada trust and it will benefit her successive generations.  You can imagine how much things can change within 365 years; it seems the trust should be built to evolve with the times and yet have strong safeguards built in.  I think you're right that having more than one trustee to provide checks and balances is a good idea.

@Chris K.- Thanks for the advice.  Her real estate assets are actually much smaller than her stocks / bonds, and she's actually not concerned if the real estate gets sold off after her death if there are no adverse tax consequences.  

@Daniel McNulty- Thank you for reminding me of the step-up in basis.  I remember reading that a long time ago and somehow forgot.  The estate plan is all set up, this trustee selection issue was the only remaining issue.  

@Loren Howe- In my experience, family members don't really understand the fiduciary duties of a trustee.  Agree with you that a disinterested natural person trustee may be dangerous.  However, if she went with a bank, the bank would just liquidate the rental property portfolio and invest all of the assets in stocks / bonds.  This would result in tough tax consequences, but at least a bank would better understand fiduciary duties.  So there's the conundrum.  

A colleague of mine is looking for a successor trustee for her trust (i.e., a trustee who would take over after she passes away) who is knowledgeable with managing rental property investments as well as a stock and bond portfolio.  Anyone have any recommendations? 

@Carson McFadden- Every owner is a little different, but I would prefer a summary page that lists overall income versus expenses, then pages for each individual unit. 

@Emil Pinlac - I'm actually an attorney myself.  A general real estate attorney should be fine.  When I'm looking to hire an attorney outside of my own practice area, I use avvo.com to find one.  

@Emil Pinlac- Haven't done this myself, but I think this could work if you have a strong contract that addresses all contingencies.  The contract should also clearly specify how all the duties associated with maintaining the property and managing the tenant(s) are divided amongst your friends.  Hire an attorney to help draft the contract and deal with all this.