Trustees Will Not Sell the Farm

[gez]

My question involves estate proceedings in the state of: Illinois


So, I've got a 1/8 interest in this farm. I received this interest because my Mom rescinded her interest in the estate, in effect giving my brother and I her interest. It's worth around 3,200,000 or my 1/8 would be around $400,000. It was an AB trust and both the A and B have passed. Anyway, the 2 executors who each own a 1/4 refuse to distribute the asset or sell it. They say they're leaving it in the trust and there's nothing I can do about it. Illinois farm land is at an all time high and I'd like to sell. They will not buy me out. My uncle, one of the executors, has said he’d like to buy it when the price of farm land falls. The executor's son is living in the house and only paying enough rent to cover the taxes on the house. The rent is way under fair market value. He was living there for free until I bitched about it. My uncle is also renting part of the farm to himself for less than fair market value. What do I do to get out of this deal?

I really just want out. The executors are horrible business people and that drives me nuts. They are my aunt and uncle and they think they can treat me like I’m 12. I’m 45 BTW. They filed a 1041 for 2011. I’ve requested a full accounting and their saying they don’t have to give me one because grandma hasn’t been dead for a year. I saying they do because they went with a 12/31 year end. The will says they have to give me an accounting at least annually. Their communication is awful. They told me in March that I wouldn’t get a K1 till 2013 and then gave me a 2011 K-1 a month later around 4/10/2012. What are my options?

[Mr. Knowitall]

Quote the language from the trust that you believe requires that the trustees sell the land. Also, quote the language pertaining to accountings.

Trusts have trustees, not executors. Are you confusing the terms, or are you referring to the executors of the probate estate living in property held by the trust? If you believe that the trustees are renting the property at below-market rates, and the trust does not include an exception for the rental at issue, you can explore taking action against them for a breach of their fiduciary duties.

[gez]

Thank you for the reply.

I don't have the will and trust agreement handy, it’s at my office. I’m fairly sure it says something like "The trustees shall provide a full accounting to the beneficiaries at least annually". I looked and I couldn’t find anything in the trust that requires them to sell the farm.

The trust rents about 50% of the farm ground to my uncle, one of the trustees. The other 50% is rented to a guy who does custom farm work for the trustee. So what’s really going on is the trustee isn’t actually farming. He hires the tenant to plant and harvest the ground he rents from the trust and then the trust rents the rest of the farm ground to the same guy for less than fair market value. I can’t prove it, but I think he pay’s this guy less than fair market value for the work in exchange for reduced rent on the ground. He has no written leases on either the house or the farm ground. I would never rent ground without a lease. I’ve been on both sides of renting farm ground and I’ve always insisted on written leases. There is just too much money involved. The trustees won’t even tell me when the cash rent payments are due on the farm. You don’t rent out farm ground by the month. You normally rent it for the crop year. Payments are normally made in three stages. A down payment when the lease is signed, normally in the summer before the lease starts, a payment in the spring and a final payment in the fall. Some landlords collect a down payment when they sign the lease and the balance in January. So, for 2013, I’ll negotiate my lease in July or August of 2012 and collect a 10% down payment at that time. In Illinois, farm leases normally run from March 1 to the end of February. My tenant will then pay me 45% in April 2013 and the remaining 45% in November of 2013.

What pisses me off about the accounting is I manage to get my business accounting by the 10th of every month. He can’t even give me a accounting for a tax return that was already filled. My Mom got a list of assets from when my grandmother died. My Mom didn’t bypass all the assets only the real estate. I handle my mom’s business affairs and I can’t get from the list of assets to what I know was distributed. So it appears to me that some cash might be missing or still in the trust. There’s over $150,000 that’s unaccounted for. I don’t really know, but I’d really like to know. On the other hand, he’s probably only screwing me out of $5,000 a year, since I only own an eighth. On the other hand, that means he's screwing my brohter out of $5,000, and my AUnt and Uncle out of $10,000 each. I’m more worried about what happened to that 150,000. My Mom doesn’t really need that money, but I’d like to know what happened to it. The other executor / trustee is my Aunt who doesn’t even realize she’s getting screwed. I think the executors/trustees are some what upset about my Mother doing the bypass. She’s 79 and has a taxable estate. It made no sense for her not to rescind her interest.

I’d like to give this interest to my children, but the way I understand it, I could have nothing to do with it. I think my children are just too young. They are 7and 8 years old. It's too much of a mess to do that.

Besides my brother, the other quarter is owed by my other uncle who works at Wal-Mart. He has no clue and just doesn’t want to upset the apple cart. I think I’m going to have to get my lawyer involved and push it. I really don’t want to do that.

Sorry for the long post. I tried to simplify it as much as possible, but it’s a flipping mess.