Posted by William Bronchick on December 06, 2001 at 20:36:43:
A beneficiary can sue the trustee for breach of fiduciary duty, but I don’t see how this can happen if the seller was only the beneficiary for 30 seconds!
Can a beneficiary sue a Trustee? - Posted by corey
Posted by corey on December 06, 2001 at 16:57:56:
Can the beneficiary of a trust sue a trustee?
I am looking to form land trusts in the future using subject to deals in which to acquire properties. I am looking at having my newly formed property management LLC as the trustee of the trust and my property acquisition company (also an LLC) will become beneficiary of the trust when the seller assigns me his or her beneficial interest in the trust.
After I buy these properties with my property acquisition company, I will then again assign the beneficial interest into another entity such as a newly formed LLC for rentals and an S-Corp for rehabs and flips.
Therefore, I really see my only potential liability is if the former seller can sue the trustee of the trust (my property management company) which I think that they can not do, by the terms of the land trust and under trust law. I just want to be sure on this one. Is this right?
In case the seller wants to sue my property acquisitions company, hopefully at that time I am sued they will end up suing an empty entity with no assetts because I will have already assigned the companys assets (beneficial interests of the trusts) to another entity.
Do you like the entity structure I have here to protect my interests? Any recommendations?