Difficulty: Easy

Average Score: 100%

If, in five years, she wants to sell a property, can she? Why or why not?

Rationale

Martha can take a property out of the trust and sell it, because it is a revocable trust.

In a revocable trust, the grantor retains the ability to modify or dissolve the trust, allowing them to remove assets, including properties, at any time. This flexibility enables Martha to sell her property if she chooses to do so in five years.

A (Martha cannot touch her properties once they are in the trust—they now belong to the trust itself, not to her.) YOUR ANSWER

This statement is inaccurate because, in a revocable trust, the grantor retains control over the assets. While the properties are titled in the name of the trust, the grantor can still manage and alter the trust assets as needed.

B (The only way Martha can remove her property from a revocable trust is to dissolve the trust, then re-form it with the remaining property.) YOUR ANSWER

This choice is misleading. Martha does not need to dissolve the trust to remove property; she can simply withdraw assets as desired while the trust remains intact. Dissolution is unnecessary for modifying a revocable trust.

C (Martha can sell a property from the trust, if her backup beneficiary and trustee agree to the sale in writing.) YOUR ANSWER

While it's true that a trustee's approval may be relevant in certain situations, in a revocable trust, the grantor (Martha) typically has the authority to sell property without needing consent from beneficiaries or the trustee. Thus, this choice does not accurately describe her rights.

Conclusion

Martha's ability to sell a property from her revocable trust stems from her retained control over the assets. Unlike irrevocable trusts, revocable trusts allow the grantor to make changes, including selling or removing properties, at any time. This ensures that she can manage her assets according to her needs and future plans, maintaining flexibility in her financial decisions.

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