Sep 24, 2010
Liza: Can a person writing a will or trust set any rules about when a piece of property in the will or trust should be sold? For example, I want my two children to share in the rental income from some property but I don't want them to sell it unless they can receive a certain amount. So, I love your question. Because it comes up so often in estate planning and it raises a great issue: how much can we, or should we, try to control what's going to happen after we're gone? I'm the kind of mom who insists on packing my children's lunches for school so that I have a handle on what they're eating while I'm not around. (Of course, they sometimes trade their lunches, or don't eat them at all, but I like to think I know what's going on.) So, I get the whole 'control freak' impluse (Just ask me kids!) The answer is that, yes, you can place that property in trust. You can even make those kids the trustees. And you can absolutely specify that they cannot sell the property unless they get a certain price. But, is that really a great idea? Here's the thing: you're going to be dead. And, if the last two years hasn't taught you that WEIRD STUFF HAPPENS ALL THE TIME THAT WE CAN'T ANTICIPATE , I don't know what will (Think of the poor bond traders at Lehman Brothers....). The price you specify might be insanely high, or ridiculously low. Your children may have a medical emergency and really need to sell the property, even at a less than fabulous price. If you were my client, I'd want to know what's driving your concern and think of a more flexible alternative. Are you worried your kids don't know how to drive a good bargain? (Maybe name someone else as the trustee.) Are you worried they don't value the property as much as you do? (Maybe don't give it to them.) Do you feel that you can't talk this over with them now and let the document just give them discretion to do what's right under the circumstances as they actually play out? (If so, again, perhaps they're not the right people to manage the property.) When working with clients, I try to help them understand that after they're gone it's hard to know what is going to make sense over the long run. It's best to pick good people for the decision-making roles and write a document that is flexible enough to let them accomplish your goals in a way that makes sense at that time, rather than try and be a control freak from the grave.