If co-sellers were beneficial tenants in common, what action may be necessary?

• A. No new trustee is required
• B. The buyer becomes sole owner
• C. The transfer must be cancelled
• D. The seller must appoint another trustee to overreach the beneficial interests

Answer: (D)

When property is held on trust and there are beneficial interests, overreaching can occur when the legal title is transferred by trustees. Overreaching shifts the beneficial interests from the land to the proceeds of sale, so the buyer acquires the legal estate free of those interests. A key requirement for overreaching is that the disposition is made by at least two trustees acting together.

If the co-sellers hold as beneficial tenants in common, achieving overreaching may require appointing a second trustee. With two trustees, the sale can overreach the beneficial interests; without a second trustee, the buyer could take subject to those interests. Therefore, appointing another trustee to enable overreaching may be necessary.