How do I break a Family Trust?

Question

My Grandmother is a Settler and a Trustee. The trust was set up last year and the Benefactors are her children.

She is under the impression she can buy the trust out and gain full control of her property without any negative consequences.

From what I've learned it is not easy to break a trust before the debt has been paid off but I thought if she were to pay the debt in full the house would still go to the benefactors and not to her.

My Grandmother is a Settler and a Trustee. The trust was set up last year and the Benefactors are her children.

She is under the impression she can buy the trust out and gain full control of her property without any negative consequences.

From what I've learned it is not easy to break a trust before the debt has been paid off but I thought if she were to pay the debt in full the house would still go to the benefactors and not to her.

The house is currently mortgaged and she wants to sell the property. She believes that any profit made from the house will automatically go to her and not into the trust and then to the benefactors?

Who is right?

Answer 1

Who gets the proceed from selling of the property is completely dependent on the language of the trust.

The bottomline is that if she still has control of the properties inside the trust, then her debtors can also go after them.

So if she had set up the trust to avoid debts, then chances are it is irrevocable and thus proceeds will go to beneficiaries when she passed.

It is best that you take the trust agreement and consult an attorney; or go back to the attorney who set up the trust in the first place.

Best wishes.

Answer 2

I believe it goes to the benefactors when she dies ,
Until then , the property is hers .

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Answer 3

Contact a lawyer.