Question 1

Alice is the trustee for property held in trust for her late sister's children. The primary asset of the trust estate is $100,000 received from an insurance policy. Due to her hectic schedule, when Alice received the funds she deposited the money (temporarily) in her money market account. For six months, she paid the kids' expenses from her checking account. What did Alice fail to do?

Question 2

Jennifer's will leaves her property (including the family residence) in trust for her children. Her brother, Matthew, is the trustee. Since she wants her children to get the home after the trust terminates, she includes a provision in the trust agreement that forbids the trustee from selling the property. Since the real estate market was heating up, Matthew told the beneficiaries that he was selling the residence. He realized a healthy profit from the sale. Matthew's action was permitted.

Question 3

Julie's will leaves her property in trust for her daughter, Pamela. She picked a major bank as the trustee. One of the assets in the trust estate is a rental property located in a Detroit suburb. The trust agreement contained a provision authorizing the trustee to sell any property, when appropriate. Pamela is a real estate executive and she wanted the trustee to sell the building, since she felt the market was at its peak. The trustee refused to sell the property. Subsequently, the building depreciated to half its value from a year ago. At that time, the bank bought the building so it could expand one of its branches. Pamela sues the bank. What will the court likely due?