The Trustee Wants to Buy the Farm: The Uhl Trust Case
A family trust owns farmland. One beneficiary would like to buy it, while others disagree about whether it should be sold or what it is worth. Now add another detail: the buyer is also the trustee.
That person’s role creates questions beyond whether they can afford the purchase.
What happened in Uhl?
In In re Trust of Uhl, No. 23-0687, decided April 24, 2024, Eric Hennings served as trustee and was one of the beneficiaries. After the event ending the trust’s term, he sought approval to buy its farmland at an appraised value. Other beneficiaries objected.
The Iowa Court of Appeals affirmed denial of the proposed sale. The trust’s terms did not give him the claimed power to sell after termination, and the court declined to approve the transaction as part of winding up. The opinion also addressed the proposed self-dealing and the duty owed to the beneficiaries. It remanded with directions concerning further administration.
The case did not establish that a trustee can never purchase trust property. It shows why authority, the trust’s stage of administration, and the conflict must each be examined.
What duty does the trustee owe?
Iowa Code section 633A.4202 requires administration in the beneficiaries’ interests with due regard for their respective interests. It also makes a transaction affected by a material personal conflict voidable by an affected beneficiary unless a statutory exception applies, such as qualifying authorization, consent, or court approval.
Section 633A.4203 separately requires reasonable care, skill, and caution in light of the trust’s purposes, terms, and circumstances.
A trustee who is also a beneficiary therefore needs to distinguish what they want personally from what they are authorized to do for the trust.
Why is an appraisal not the whole answer?
Imagine two family members disagreeing about land value. An appraisal may help frame that dispute, but it does not answer who has the power to sell or whether the process properly accounts for everyone’s interest.
Useful questions include whether the trust calls for distribution of the property itself, what authority remains after termination, and what approvals are needed for a transaction involving the trustee. Those questions should be resolved before treating a proposed purchase as a completed plan.
For beneficiaries, the practical starting point is the trust document and the actual terms of the proposed transaction. For the trustee, the lesson is that wearing both hats does not remove either set of responsibilities. Personal interest should be addressed openly through the procedures the law and the trust require.
Tyler ThompsonAuthor