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How Does a Beneficiary Get Money From a Trust?

How Does a Beneficiary Get Money From a Trust?

When a person dies, their assets are given to their beneficiaries. Usually these beneficiaries are their heirs, loved ones, or anyone who they have indicated as a beneficiary in their will. The administration of a will can involve a lengthy court process called a probate. Many people opt to avoid this legal process by creating what’s called a trust.

A trust is a legal entity in which you can place your assets for safe keeping. It can be used by you or your appointed beneficiaries while you are still living and after you have passed. A trust is created by a grantor, who makes a trust agreement document that contains its beneficiaries and all of the trust’s assets. A grantor can manage their trust, but many opt to appoint a lawyer or financial institution to oversee their trust.

When a trust’s grantor creates the original agreement, they indicate the method by which their assets should be distributed. This distribution can be an allotted yearly amount, percentage agreement, or even a lump sum. The distribution method can also be dependent on certain situations that may change or develop over time. Unlike a will, a trust can be a flexible agreement that is not dependent on a grantor’s passing — and this would be referred to as a living trust.

Types of Trusts

There are two types of trusts to choose from, and the decision is an important one. The first type is a revocable trust, or living trust, and it allows the grantor to stay in charge of their trust until their death.

The other type of trust is an irrevocable trust, and with this kind of trust, you cannot make changes to it once it is created. A trustee has immediate control over the assets you put in the trust, and this does not change upon your death. An irrevocable trust contains many tax advantages and can be a beneficial option if it is designed with the help of an estate planning attorney.

Methods of Trust Distribution

There are a few ways that beneficiary can get money from a trust, depending on what the grantor determined in their initial trust agreement:

  1. Outright distribution. If the grantor trusts their beneficiaries with the financial responsibility, they may decide to have their beneficiaries receive their inheritance outright, without any restrictions in place. This can be in the form of a check, cash, or house deed.
  2. Staggered distribution. A common method of monetary distribution from a trust is staggering it over time. In this case, a grantor grants an amount to bestow unto the beneficiaries at a determined frequency over time. Some grantors may view this as a yearly allowance, while others choose important dates like birthdays or weddings, upon which a beneficiary will receive inheritance.
  3. Trustee’s discretion. A trustee is often appointed by a grantor to determine how and when to distribute a beneficiary’s inheritance. This method may be chosen when the beneficiary has trouble managing their money or are not mentally fit to manage their finances. Appointing a trustee to determine this is a good idea in case the grantor passes away before all of the inheritance has been distributed.

When a trustee is put in charge of assets upon a grantor’s death, they may have a certain window of time to distribute these assets, but it will likely not be a speedy process. Oftentimes, bills, debts, and taxes have to be dealt with before final proceedings can be completed. A trustee’s duty is to ensure this happens and that the chosen beneficiaries receive their inheritance.

If a beneficiary feels that it is taking an inappropriate amount of time or that they are not fairly receiving money from a trust, there are legal actions they can take against the trustee. Filing claims like this can be costly, though. That is why appointing a trustee in the first place should be a decision that is made very carefully, with someone the grantor trusts.

Hiring a California Trust Attorney

Hiring an attorney with knowledge of probate and trust administration laws is a vital step to take when creating a secure and solidified trust. Our team of California trust attorneys at Huber Fox, P.C. have many years of experience with California trust administration and can help you write your trust agreement, oversee the process, or even be appointed as your trustee.

Your lawyer can help with many complex or time-consuming steps of this process and ensure that all necessary documents, paperwork, and processes are completed accurately and efficiently. If a trust is not set up properly, it can mean legal issues down the line for you and your loved ones. Our attorneys can help with many steps of this process, including:

  • Handling necessary paperwork
  • Providing notices to beneficiaries
  • Protecting and overseeing assets
  • Helping with property transfers
  • Overseeing the executor and trustee

Our trust administration attorneys understand that no two estates are the same, and that your trust should be managed in the way you see fit. Depending on the type of trust you create, we are here to help in the unique situations that might arise. This can mean preventing excessive spending by heirs, accounting for marital changes, avoiding probate law, allowing for charitable giving, providing for a disabled adult, and protecting the privacy of your finances.

You deserve an attorney you can count on to act in your best interest when it comes to the creation and distribution of your trust. The lawyers at Huber Fox, P.C. are here to ensure your trust is set up correctly and follows California laws, so that your beneficiaries can receive their inheritance without issue — and so that you can rest assured knowing your assets are taken care of.

When it comes to the assets you have worked so hard for, don’t let them fall into the wrong hands once they are no longer in yours. Contact us today to learn more about what our estate planning lawyers can do for you.

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