Trustee Personally Liable for Rent-Free Occupancy and Trust-Funded Renovations

A recent decision from the New Hampshire Supreme Court delivers a clear and costly reminder to trustees: living rent-free in trust-owned property and using trust funds for personal renovations constitutes a breach of fiduciary duty, and the trustee can be charged personally for both the improvements and the fair rental value.

The Facts

After their mother died, three siblings, Nathaniel Moffat, Sarah Srebro, and Matthew Moffat, became equal beneficiaries of the Pamela Dawson Moffat Revocable Trust. The Trust was the residuary beneficiary of their mother’s Maryland-probated estate and required equal distribution among the three children.  The Trust was apprently not funded with either of the properties, thereby necessitating probate.  The trust held two neighboring properties in Hancock, New Hampshire; the first being a longtime family summer home, and the second being a nearby house purchased in 2020 with the mother’s funds.

Nathaniel served as trustee. He moved into the nearby house, paid for substantial renovations with trust assets, and occupied the home rent-free for an extended period. When the siblings could not agree on how to divide the real estate, Nathaniel petitioned the probate court for partition. Sarah responded with counterclaims alleging multiple breaches of fiduciary duty.

The Probate Court conducted a four-day trial, the probate court exercised its equitable partition powers to award the summer home to , award the nearby house to Nathaniel, but charged Nathaniel with the value of the trust-funded renovations and the fair rental value of his rent-free occupancy, finding that he had breached his fiduciary duties by prioritizing his personal interests over those of the other beneficiaries, and further, ordered him to reimburse the trust for the attorney’s fees and costs incurred in the litigation.  The case was appealed. 

On July 7, 2026, the New Hampshire Supreme Court affirmed the probate court's ruling in full. The Court held that, the probate court acted within its broad equitable discretion in partitioning the properties, the court's findings of breach of fiduciary duty were supported by the record, specifically, the trustee’s decision to occupy trust property rent-free and to use trust funds for renovations that primarily benefited him, and that the probate court had proper subject-matter jurisdiction over the fiduciary-duty counterclaims, even though the trust contained a District of Columbia choice-of-law clause.  On a procedural basis, the Supreme Court found that certain challenges to the remedy (including fee awards) had been waived or not properly preserved for appeal.Why This Matters for Families and Trustees

Trustees often believe that because they are also beneficiaries, they can treat trust real estate more casually, especially a family home. This case firmly rejects that notion. A trustee who occupies trust property without paying rent or who spends trust money on improvements that primarily benefit himself can be surcharged for both the rental value and the cost of the renovations. The decision reinforces several core principles of trust administration that are especially relevant in aging-in-place and family-wealth planning:

• A trustee must act solely in the best interests of all beneficiaries.
• Self-dealing with trust real estate (even when the trustee is also a beneficiary) requires careful documentation, consent, or court approval.
• Probate courts have wide equitable authority to fashion practical remedies when siblings cannot agree on the division of trust property.
• Personal use of trust assets without proper accounting creates lasting financial and family consequences.

Conclusion

Parents who place a family home or vacation property into a revocable trust (or who fund a trust that later purchases real estate) should consider clear instructions about occupancy, rent, and improvements. Beneficiaries who serve as trustees must understand that the role carries strict fiduciary obligations, even toward siblings.  When family real estate is involved, proactive planning and transparent communication remain far less expensive than years of litigation and personal liability.

If you are serving as trustee of a trust that owns real property, or if your family is struggling with the division of trust-owned homes, consult experienced counsel before decisions about occupancy or renovations are made. As this case demonstrates, the cost of getting it wrong can be substantial.

Case: Moffat v. Srebro, 2026 N.H. 25 (July 7, 2026)

Texas Court of Appeals: A Trustee Cannot Appear Pro Se — The Unauthorized Practice of Law Sinks an Appeal

A recent Texas Court of Appeals decision delivers a clear and important reminder for trustees, settlors, and families who rely on trusts: a non-lawyer trustee cannot represent the trust in court. Doing so constitutes the unauthorized practice of law (UPL) and can result in the dismissal of the entire case.

The Case

In Almericas Veterans Mortgage Trust v. Brock & Scott, the Third Court of Appeals dismissed an appeal filed by the trust’s pro se trustee.  The trustee, Ronnie Dansby, filed a notice of appeal on behalf of Almericas Veterans Mortgage Trust after receiving an adverse trial-court order. The Court of Appeals promptly notified him that, under Rule 7 of the Texas Rules of Civil Procedure, a trustee may not appear pro se in a representative capacity. Rule 7 permits individuals to represent only themselves,  not other persons or entities. Only a licensed attorney may represent a trust.

Because no attorney filed an amended notice of appeal on the trust’s behalf, the court dismissed the appeal. The court relied on established Texas authority which holds that a non-attorney trustee who files pleadings or appears for the trust engages in the unauthorized practice of law.

Why This Matters for Aging-in-Place and Elder Law Planning

Many clients name a trusted family member as successor trustee of their revocable living trust, believing the trustee can handle “everything” without hiring a lawyer. This case shows the limits of that assumption.

• A trust is a separate legal arrangement. When a trustee acts on behalf of the trust in litigation, the trustee is representing another’s interests, not merely his or her own.
• Filing a notice of appeal, a motion, or any pleading for the trust is considered the practice of law under Texas law.
• Courts will dismiss cases, sometimes after significant time and expense have already been invested, if the trust is not properly represented by counsel.

This rule applies not only in Texas but in most states. The principle is the same: non-lawyers may represent themselves, but they may not represent others (including a trust or an estate).

Practical Takeaways for Trustees and Families

• Do Not File Pleadings Pro Se on Behalf of a Trust: Do not file pleadings pro se on behalf of a trust. Even a simple notice of appeal can trigger dismissal.

• Budget for Legal Representation:  When a trust becomes involved in litigation (foreclosure defense, creditor claims, beneficiary disputes, etc.), the trustee must retain licensed counsel.

• Choose Successor Trustees Carefully: Name individuals who understand that professional legal help will be required for court matters, and consider naming a corporate or professional trustee when complex assets or potential disputes exist.

• Review Your Trust Language: Confirm that the trust authorizes the trustee to hire attorneys and pay legal fees from trust assets.

• Act Quickly If a Pro Se Filing Has Already Occurred: Many courts will allow a short window for a licensed attorney to appear and cure the defect.

Bottom Line

A well-drafted revocable living trust can avoid probate and provide excellent management during incapacity or after death. But the trust itself is not a “self-help” vehicle in the courtroom. Trustees who attempt to represent the trust without a license risk having their case dismissed, and may themselves face accusations of unauthorized practice of law.

If you serve as a trustee (or expect to), treat litigation as a professional matter that requires licensed counsel. Protecting the trust’s assets and the beneficiaries’ interests is far more important than trying to save a legal fee.

Buying/Selling a Business- Nuts and Bolts

This office often consults with clients regarding the sale of a business, typically in settlement of an estate.   The following is general information that can aid a client or a client's family in understanding the process and available options. 

I.  Corporations/Limited Liability Companies

Most business sales/purchases of corporations or companies (limited liability companies) are either executed through an Asset Purchase Agreement (APA) or a full equity/stock acquisition (also called a stock purchase, share purchase, or equity purchase). They differ fundamentally in what is being bought, how ownership and risk transfer, tax treatment, complexity, and continuity of operations.

A.  Core Distinction:  Asset Purchase vs. Full Acquisition

• Asset purchase: The buyer acquires specific assets (and typically only specifically assumed liabilities, if any) of the target business under an Asset Purchase Agreement. The seller’s legal entity continues to exist afterward and retains any excluded assets, liabilities, and the sale proceeds.  This seller's legal entity is typically either terminated or repurposed immediately after the sale. 
  cantrellfirm.com
• Full acquisition (stock/equity purchase): The buyer acquires all (or substantially all) of the ownership interests (shares of a corporation or units/membership interests of an LLC) from the owners. The buyer takes ownership of the entire legal entity itself, including all its assets and all its liabilities (known and unknown).
  cantrellfirm.com

Side-by-Side Comparison

Aspect	Asset Purchase	Full Equity/Stock Acquisition
What is transferred	Selected assets (equipment, IP, inventory, contracts, goodwill, etc.) and only agreed liabilities	Entire ownership of the legal entity (and therefore everything it owns and owes)
Seller’s entity after closing	Continues to exist; holds retained assets/liabilities and sale proceeds	Transferred to buyer; seller(s) exit ownership
Liability exposure	Limited: buyer assumes only liabilities expressly listed in the APA	Broad: buyer inherits all historical and contingent liabilities
Tax treatment (buyer)	Often favorable: step-up in tax basis of assets to fair market value; ability to amortize goodwill (typically over 15 years  in the U.S.)	Usually less favorable: carryover (historical) tax basis; no automatic step-up (unless special elections such as IRC §338(h)(10) or similar are available and elected)
Tax treatment (seller)	Often less favorable: potential ordinary income on certain assets; possible double taxation for C-corporations (entity-level tax + shareholder tax)	Often more favorable: typically capital gains treatment at the owner level; single level of tax in many cases
Contracts, licenses & permits	Usually require individual assignment and third-party consents; non-assignable items may not transfer	Generally continue automatically with the entity (subject to change-of-control clauses)
Employees & benefits	Often treated as new hires by the buyer; benefit plans usually do not transfer and must be recreated	Continuity—employees remain with the same employer; plans generally stay in place
Complexity & process	More complex and time-consuming: asset-by-asset transfers, title changes, consents, possible sales/use taxes	Simpler transfer of ownership interests; fewer mechanical steps
Business continuity	Potential disruption; buyer may need to re-establish relationships and re-title assets	High continuity; operations, contracts, and identity of the business remain largely intact
Typical preference	Preferred by buyers (liability control + tax benefits)	Preferred by sellers (tax efficiency + cleaner exit)

B.  Key Advantages and Disadvantages

Asset Purchase

• Buyer Advantages:
• Ability to cherry-pick desirable assets and leave unwanted liabilities behind.
• Tax step-up and amortization benefits that can improve after-tax cash flow.
• Reduced risk of unknown historical claims (e.g., environmental, employment, tax, or product liability).

• Buyer Disadvantages / Seller Advantages:

• Administrative burden and cost of transferring individual assets and obtaining consents.
• Risk that key contracts, licenses, or customer relationships cannot be assigned.
• Potential sales tax or transfer taxes on assets.
• Seller (especially a C-corp) may demand a higher price to compensate for less favorable tax treatment.

Full Equity Acquisition:

•  Buyer Advantages:

• Operational and contractual continuity with minimal disruption.
• Simpler mechanics and often faster closing once diligence is complete.
• Avoids the need to retitle assets or renegotiate every contract.

• Buyer disadvantages:

• Full assumption of all liabilities, including contingent and unknown ones.
• No automatic tax basis step-up (unless a special election is available and agreed).
• Greater due-diligence burden because the entire historical risk profile transfers.

C.  Practical Considerations

• Buyers commonly prefer asset deals when the target has significant contingent risks, when only part of the business is desired, or when maximizing tax benefits is a priority.
• Sellers commonly prefer equity deals for tax efficiency, simplicity, and a complete exit.
• Deal structure is heavily negotiated and influenced by the target’s entity type (C-corp, S-corp, LLC/partnership), the presence of minority owners, regulatory licenses, and tax elections that can sometimes make a stock deal taxed more like an asset deal (or vice versa).
• In both cases, the definitive agreement (APA or Stock/Equity Purchase Agreement) will contain detailed representations, warranties, indemnities, purchase-price adjustments, and closing conditions that allocate risk between the parties.

In short: an asset purchase lets the buyer acquire the business operations selectively while leaving the legal shell (and many risks) behind; a full equity acquisition transfers the entire legal entity and everything that comes with it. The choice is driven primarily by risk allocation, tax consequences, and the desire for operational continuity. Legal, tax, and accounting advice specific to the jurisdiction and parties is essential for any actual transaction.

II.  Sole Proprietorship

A sole proprietorship has no separate legal entity. The business and the owner are legally the same "person." There are no shares, units, or ownership interests that can be transferred independently of the individual.

• A true “full acquisition”/equity or stock purchase is not possible. You cannot buy the “company” itself because none exists as a distinct legal person.
• Virtually every acquisition of a sole proprietorship is structured as an asset purchase. The buyer buys specific assets (equipment, inventory, customer lists, goodwill, intellectual property, etc.) directly from the individual owner.
• Liabilities stay with the seller personally unless the buyer expressly assumes them in the agreement. The buyer generally does not inherit unknown personal liabilities of the sole proprietor simply by buying assets.
• Tax treatment follows the sale of individual assets (ordinary income on inventory/depreciation recapture, capital gain treatment on other items, allocation of purchase price under the residual method). The IRS generally treats the sale of a business as the sale of its individual assets.
  irs.gov
• Continuity issues (contracts, licenses, employees) still arise and often require third-party consents or new agreements, just as in a corporate asset deal.

In short, the classic “asset vs. stock” choice largely disappears; the deal is almost always an asset purchase.III.  Partnership: General Partnership, Limited Partnership, LLP, etc.

Partnerships are entities, so both structures remain available, but with different mechanics and tax rules than corporations:

• Purchase of Partnership Interests:  This is the equity equivalent of a stock purchase.  The buyer acquires ownership interests from the partners. This can transfer the entire entity. Tax treatment is more complex than a corporate stock sale. Gain on “hot assets” (unrealized receivables and inventory) is often ordinary income rather than pure capital gain. A §754 election can allow the buyer a step-up in the inside basis of partnership assets. Buying 100% of the interests is sometimes treated, for the buyer, similarly to an asset purchase under certain IRS rulings.
  irs.gov
• Asset purchase: The partnership sells selected assets (and may or may not distribute the proceeds or liquidate). Liability exposure for the buyer is limited to what is assumed, similar to a corporate asset deal. Tax consequences flow through to the partners.
• Liability Exposure:  Liability after sale depends largely on the type of partnership.  In a general partnership, partners typically have unlimited personal liability; buying interests can expose the buyer to that history unless carefully structured. Limited partnerships and LLPs offer more protection.
• Continuity:   Continuity of contracts, licenses, and employees is generally better with an interest purchase (the entity continues), but change-of-control or consent provisions can still apply.  In other words, continuity depends upon the partnership agreement, the specific relationship/contract at issue, and the terms of the sale. 

Overall, the buyer preference for asset deals (liability control + basis step-up) and the seller preference for equity deals still exist, but partnership tax rules (especially hot assets and basis adjustments) add extra complexity that does not apply to pure corporate stock sales.IV.  Online Self-Help / Informational ResourcesThere are free, non-commercial or government-affiliated educational materials and checklists that can help buyers and sellers understand the process and protect themselves through better due diligence and awareness. They are not, however, substitutes for professional legal, tax, or accounting advice.

• IRS (tax-focused, highly authoritative):

• Sale of a Business:  The IRS "Sale of a Business" overview page explains that a business sale is generally treated as the sale of individual assets, with links to relevant forms and rules.
• Sales and Other Dispositions of Assets: IRS Publication 544 covers allocation of purchase price, residual method, and capital vs. ordinary treatment of gain/loss.
• Partnerships: Publication 541 provides specific rules for sales of partnership interests.

• SCORE:   SCORE is a nonprofit organization and resource partner of the U.S. Small Business Administration. Its network of more than 10,000 volunteer mentors provides free, expert business mentoring, education and resources to entrepreneurs.  Among these are articles and webinars covering:

• Buying and Selling a Business:  Numerous articles and webinars, some state-specific, educate business owners and prospective buyers.

• Due Diligence:  SCORE offers checklists for buying or selling a business (covers financials, assets, contracts, legal standing, employees, etc.).
• Information Gathering: “Questions to Ask When Buying or Selling an Existing Business” checklist.
• Loans and Financing:  SCORE provides information and checklists regarding obtaining business loans. 
• Valuation: Articles and checklists on the due-diligence and valuation process.

• SBA and SBDCs:  The U.S. Small Business Administration (SBA) and related Small Business Development Centers offer:

• Guidance: General guidance on managing and transferring businesses, including the need for a formal sales agreement that specifies assets or ownership interests.
• Resources: Various free checklists from SBDCs (e.g., business buyer’s checklists that explicitly ask whether the deal is an asset or stock/interest purchase and what liabilities will be assumed).

• Other: Practical informational aids can be acquired from:

• Business Centers:  Free due-diligence checklists are published by university-affiliated or state small-business centers that walk through financial review, physical assets, contracts, UCC filings, licenses, and employee issues.

These materials equip clients to ask better questions, prepare stronger due-diligence requests, and recognize major red flags before signing anything. Because entity type, state law, and tax elections vary widely, the resources themselves repeatedly note that professional advice remains essential for the actual transaction documents and tax planning.