A trust owns income-producing investments and a non-income-producing house lived in by the income beneficiary, who is also the trustee. Which, if any, of the current expenses of the house are deductible expenses of the trust?
Can a beneficiary live free in a trust?
Of course, a Trustee who is NOT a beneficiary cannot live free in Trust property because that would be a conflict of interest and a breach of duty for the Trustee. But even as a Trustee/beneficiary, living rent free is not allowed. But just because rent is required to be paid, does not mean it will be.
Can a house be part of a special needs trust?
If the house is owned by the special needs trust, then the house will be part of the trust assets available to pay Medicaid back. This is particularly troublesome when the home is the residence of the beneficiary and the beneficiary’s family as well.
Can a court supervised trust buy a house?
The trustee of a court-supervised trust may want to seek prior court approval of any decisions about rent and occupancy. Under the SSI and Medicaid rules, a trust funded with assets belonging to the beneficiary must be maintained for the sole benefit of the beneficiary.
When is a breach of trust beneficial to the beneficiaries?
⇒ In Armitage v Nurse [1998] it was said that “breaches of trust are of many different kinds” → so a breach of trust can be beneficial to the beneficiaries. For example, if a trustee invests in something he shouldn’t have invested in and that investment makes a greater profit, technically that is a breach of trust but a court will not give a remedy
Can a beneficiary release a trustee from liability?
The beneficiary can acquiesce or agree to release the trustee from liability. The rule has been adopted by STEP (The Society of Trust and Estate Practitioners) and the Government is ‘urging’ the regulatory bodies to adopt it (Hansard, 14/9/2010).
What does it mean to falsify a trust account?
⇒ Falsifying account means the beneficiary does not accept the account and requires the trustees to put the trust property into a state which is consistent with them having properly managed the trust property. If necessary, they are required to use their own money to bring this about by, for example, replacing trust property
