Creating And Protecting Your Legacy

Understanding liability on contaminated properties in a living trust

On Behalf of | Oct 31, 2023 | Estate Planning |

Trusts are tricky, but once you get a good grasp of how they work and the responsibilities that come with it, you can add properties without worries. However, when the properties you want to include in your living trust are contaminated, the rules on liability are trickier.

What are contaminated properties?

Contaminated properties are toxic, polluted or facing similar environmental hazards. Examples of these properties are auto repair shops polluted with petroleum solutions and printing establishments using toxic chemicals.

Who can be responsible?

If a property in a trust faces contamination, a cleanup is necessary for it to be utilizable. Moreover, other issues, such as health concerns from neighbors resulting in lawsuits, may also arise.

When dealing with these cases, who will be responsible? Depending on the circumstances, any of the following people can be liable:

  • Trustor: As the owner of the living trust, the trustor is automatically responsible for cleanups and other liabilities involving the properties in the trust.
  • Trustee: The trustee of a living trust with contaminated properties can also be personally responsible.
  • Successor and beneficiaries: If the cleanup is incomplete by the time the trustee steps in, they and the beneficiaries can be responsible.

The liability stems from the federal Superfund law imposing joint and individual liability to past and current owners and operators of contaminated properties.

Avoiding repercussions through proper estate planning

Contaminated properties are still valuable properties. However, you have to take the necessary precautions before you include one in your living trust.

Seeking advice from an expert estate planning attorney can help you understand the possible consequences of including contaminated properties in your trust and explore available solutions to materialize your plan with minimal liability.