Circumventing 'Due on Sale ' By J D Bronchick - Posted by Jaydee Bredenkamp


#1

Posted by Philly Dave on October 27, 1998 at 07:15:59:

Jaydee,

Once again, Bill is correct. A decedent (i.e., the deceased person) has no power to pass (through a Will) property that he or she did not own at the time of death. In the scenario you describe, the property intended by the terms of the Will to be devised (i.e., passed on) to a beneficiary was owned by the trust, not by the decedent, at the time of death. The practical effect, as far as the Will is concerned, is that the property does not exist and therefore cannot be passed from the Estate to the named beneficiaries.

Any transfer of this property will be done in accordance with the terms of the instrument creating the trust, or, if that document gives the Trustee the power to sell the property, according to terms negotiated by the Trustee. (If there is a close relationship between the Trustee and the purchaser(s), a review of the transaction by a court may be required to ensure its fairness to the Trust beneficiaries.)

Hope this helps. Good luck!


#2

Circumventing 'Due on Sale ’ By J D Bronchick - Posted by Jaydee Bredenkamp

Posted by Jaydee Bredenkamp on October 26, 1998 at 10:30:39:

If anyone is familiar with this strategy please get in touch with me as I have many more questions :

If a contract for deed had been signed within a trust and a few months or years go by with no problem and suddenly the people who bought the property are somehow killed , and their ’ Will ’ leaves the property to their next of kin . What would happen if the next of kin was unaware of the contract for deed and the payments stopped ? Is this scenario likely to cause problems and how would it be sorted out ?


#3

Re: Circumventing 'Due on Sale ’ By J D Bronchick - Posted by Bronchick

Posted by Bronchick on October 26, 1998 at 18:20:05:

A trust avoids probate, so even if a will bequests property, the instructions are ignored if the property does not belong to the deceased.