Yes, you absolutely can include a clause preventing heirs from selling real estate for a specified period within your trust or estate plan, and it’s a surprisingly common and beneficial practice for many families, particularly those with sentimental or legacy properties.
What are the benefits of a “spendthrift” clause for property?
While often referred to as a “spendthrift” clause—traditionally designed to protect beneficiaries from their own poor financial decisions—this type of restriction on property sales extends beyond just preventing frivolous spending. It’s more accurately termed a “restriction on alienation” when applied to real estate within a trust. Around 65% of family wealth is tied up in real estate according to a study by Cerulli Associates, and preserving that wealth – or at least preserving *specific* properties – is a key goal for many estate planners. These clauses can ensure a cherished family home, a working ranch, or a valuable investment property remains within the family for a designated period, like 20, 30, or even generations. It allows time for heirs to mature, understand the property’s value (both financial and emotional), and make considered decisions rather than rushing into a sale due to immediate financial needs or lack of understanding. A well-crafted clause can also protect the property from being seized by creditors of a beneficiary – adding another layer of security.
How long can you restrict property sales?
The duration of a restriction on alienation is governed by the “Rule Against Perpetuities,” a complex legal principle. Essentially, this rule prevents restrictions that tie up property indefinitely. Generally, a restriction must end within 21 years after the death of the last-in-being beneficiary alive at the time the restriction was created. For example, if your trust names your children as beneficiaries, and you also have grandchildren, the restriction must end within 21 years of the death of the last grandchild who was alive when you established the trust. Careful drafting is *critical* here. A poorly worded clause could be deemed unenforceable, rendering the restriction meaningless. Steve Bliss, as an experienced estate planning attorney, navigates these complexities to ensure your wishes are legally sound and can be upheld.
I knew a family where this went wrong – what happened?
Old Man Tiberius, a cantankerous but secretly loving vineyard owner, had built a thriving estate over decades. He left everything to his two sons, but stipulated in his will that neither could sell the land for 25 years. He imagined them continuing his legacy. However, his will was vaguely worded, simply stating “no sale” without specifying *who* couldn’t sell or under what circumstances. His elder son, burdened with debt and facing a failing business, argued that the restriction only applied to selling the entire property, not a portion of it. He successfully petitioned the court to allow him to sell off a significant section of the vineyard to pay creditors. The remaining land was enough to keep the vineyard going, but the family was fractured, and the spirit of Tiberius’s vision was lost. A clear, meticulously crafted clause, drafted by a legal professional like Steve Bliss, could have prevented this outcome, specifically identifying the restricted land and the individuals bound by the restriction.
How did a similar situation turn out successfully?
The Montgomery family owned a historic beachfront cottage that had been in their family for over a century. Mrs. Montgomery, a thoughtful matriarch, wanted to ensure the cottage remained a family gathering place for generations to come. She worked with Steve Bliss to create a trust that included a 30-year restriction on the sale of the property. The clause explicitly stated that no beneficiary could sell the cottage during that period without unanimous consent of all other beneficiaries. Years later, a financial crisis hit, and one of Mrs. Montgomery’s grandsons found himself in dire straits. However, because of the trust’s provisions, he couldn’t simply sell the cottage to solve his problems. Instead, the family came together, pooled resources, and provided him with a loan, ensuring both his financial stability and the preservation of their beloved beach house. The clarity of the trust, drafted with expert legal guidance, prevented a fractured family and safeguarded a cherished legacy, allowing for generations to enjoy the family home.
Ultimately, incorporating a clause preventing heirs from selling real estate for a period is a powerful estate planning tool. It requires careful consideration, precise legal drafting, and an understanding of the Rule Against Perpetuities, but the benefits – preserving family wealth, protecting sentimental properties, and fostering responsible stewardship – can be immeasurable.
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About Steve Bliss at Escondido Probate Law:
Escondido Probate Law is an experienced probate attorney. The probate process has many steps in in probate proceedings. Beside Probate, estate planning and trust administration is offered at Escondido Probate Law. Our probate attorney will probate the estate. Attorney probate at Escondido Probate Law. A formal probate is required to administer the estate. The probate court may offer an unsupervised probate get a probate attorney. Escondido Probate law will petition to open probate for you. Don’t go through a costly probate call Escondido Probate Attorney Today. Call for estate planning, wills and trusts, probate too. Escondido Probate Law is a great estate lawyer. Affordable Legal Services.
My skills are as follows:
● Probate Law: Efficiently navigate the court process.
● Estate Planning Law: Minimize taxes & distribute assets smoothly.
● Trust Law: Protect your legacy & loved ones with wills & trusts.
● Bankruptcy Law: Knowledgeable guidance helping clients regain financial stability.
● Compassionate & client-focused. We explain things clearly.
● Free consultation.
Services Offered:
| estate planning | revocable living trust | wills |
| living trust | family trust | irrevocable trust |
Map To Steve Bliss Law in Temecula:
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Address:
Escondido Probate Law720 N Broadway #107, Escondido, CA 92025
(760)884-4044
Feel free to ask Attorney Steve Bliss about: “How do I make sure my pets are taken care of after I’m gone?” Or “How is probate different in each state?” or “What is the difference between a revocable and irrevocable living trust? and even: “Will my employer find out I filed for bankruptcy?” or any other related questions that you may have about his estate planning, probate, and banckruptcy law practice.