Trusts and Trustees
Although distribution is required to be made to the beneficiaries under a trust, until actual distribution is accomplished, title remains in the trustee, who must convey title. Rothwell v. Rothwell, 283 Mass. 563, 186 N.E. 662 (1933). When the time for distribution has arrived, the beneficiaries are entitled to a conveyance of the trust res, according to the terms of the trust. In some cases the trustee is required to distribute in kind, but the trustee's powers continue after termination sufficiently to enable the trust res to be liquidated and distributed to the beneficiaries.
Unless the trust otherwise directs or authorizes the beneficiaries are entitled to the trust res in its existing form, if such a distribution can be made.
It appears that where a distribution under a trust is to be made to a party who has theretofore died and there if no alternate distribution provision set out in the trust, the asset returns to the settlor (or, since he has also died, to his estate) on a resulting trust. See National Shawmut Bank v. Joy, 315 Mass. 457, 53 N.E.2d 113 (1944).
1 In Rothwell property was held under a trust instrument that required the trustees to make distribution to the beneficiaries one year after the death of James Rothwell, who died November 20, 1928. One question was the state of the title after that one-year period, namely on November 20, 1929. The court said: "It is plain that the trust was not self-executing and the appellant does not contend that it is. At the expiration of one year from the death of James E. Rothwell the trustees did not become mere dry trustees. The trust required them to pay over the net income and upon an event certain to convey the corpus of the trust. The duty to convey conferred upon them active duties, which prevented the statute of uses from executing the use, for to enable them to convey at the time and to the persons or classes of persons designated in the will it was necessary for the legal title to be and remain in them. (Citation omitted.) * * * The trust in the case at bar did not terminate on November 20, 1929. It terminates upon the conveyance. In Christine v. Baldwin, [95 N. J. Eq. 83, 122 A. 369], it was held that the duties and powers of the trustees do not cease until they have so divested themselves. It does not appear in Christine v. Baldwin, supra, that there is any difference in the character of the duties and powers of the trustees before and subsequent to the death of the life tenant or the happening of the event upon which the trustees are to convey, but it is plain that they are not the same; their powers and duties subsequent to the happening of the event are limited to matters looking to a conveyance of the property. These include the liquidation of their indebtedness and acts incidental to the conservation of the property pending the settlement of their accounts."
2 If, in connection with making distribution, expenses remain to be paid and there is insufficient cash on hand to do so, the trustee may, indeed must, liquidate the trust res and distribute the net proceeds derived therefrom.