An owner purchases real property for $100,000.00 and obtains…

Questions

An оwner purchаses reаl prоperty fоr $100,000.00 аnd obtains a loan for $80,000.00 from a lender. An owner’s title insurance policy could be purchased for the following amount:

Terry creаted the Smith Fаmily Revоcаble Trust, naming his friend, Frank, as the successоr trustee. The Trust cоntained the following provisions: To the maximum extent permitted by law, no interest of any beneficiary in the income or principal of this Trust shall be subject to voluntary or involuntary alienation, assignment, pledge, or transfer, nor shall any such interest be subject to the claims of creditors or liable to attachment, execution, or other legal process. The Trustee shall have sole and absolute discretion to pay to or apply for the benefit of any one or more of the beneficiaries such amounts from the net income and/or principal of the trust as the Trustee determines necessary or advisable for the beneficiary's health, education, maintenance, and support. In exercising this discretion, the Trustee may consider: The beneficiary's other income, assets, and resources known to the Trustee; The beneficiary's standard of living; The beneficiary's age, health, and life expectancy; and The needs of other current and remainder beneficiaries The Trustee may make distributions in unequal amounts and may make distributions to one or more beneficiaries to the complete exclusion of others. The Trustee's determination shall be conclusive and binding on all beneficiaries. Any undistributed income may be accumulated and added to principal. The trust required the trustee to use income and principal to support Terry’s children. The trust was to continue until the youngest child reached the age of 55, at which time, the trust was to be equally distributed to all three children. Terry passed away in 2015. Terry was survived by his three sons, Sam, Steve, and Stew. In December of 2025, Frank comes into your office stating that he wants to stop acting as the trustee, because Steve is pestering him daily asking him to dissolve the trust early. Terry says that the funds for the trust were placed in his name as Trustee in a diversified investment account with a reputable investor. He says that he has distributed funds to the children any time any of the children ask for money. Sam is the youngest child, and he turned 45 in January of this year (2025). Distributions to Sam have been sporadic. One of the main reasons more has not been distributed to Sam is that Sam has outstanding child and spousal support obligations and does not want his ex to have access to any of his income. Steve regularly asks for distributions because he often lives beyond his means. A few of his creditors have obtained judgments against him. Stew has never asked for a distribution and seems to be doing well. He owned his own business and lived in a wealthy area of the city. Create a Memorandum for Terry that addresses the following: Your concerns with the trust, Terry’s actions as trustee, and the options Terry has moving forward. Exclude from your memorandum, any personal liability Terry may have for any breaches of any his fiduciary duties. Answer according to California Law.