California | Wills and Trusts
Legal Question
If the trust gives the successor trustee the powers listed below (among others), and the successor trustee who wrote the trust instrument is to inherit principal, and takes over while the surviving trustor is still alive, can s/he self-deal with impunity? For example, can that trustee get away with using principal from the trust to pay off personal real-estate loans? Can s/he, employing an investment fund manager who works through the institution that made the real-estate loan, put up trust assets as secondary collateral? (I have no knowledge of terminology.) Is it just my naivete that makes the assigned powers appear sinister?
"To hold securities or other property in the Trustee's name as Trustee under this trust, or in the Trustee's own name, or in the name of a nominee, or the Trustee may hold securities unregistered in such condition that ownership will pass by delivery."
"To borrow money, and to encumber trust property by mortgage, deed of trust, pledge, or otherwise, for the debts of the trust or the joint debts of the trust and a co-owner of trust property."
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