Estate planning is an incredibly complex process, with many different factors and planning options. As such, it’s important to understand the essential facets of these options and how they operate. One thing many are unfamiliar with is how Trusts operate once they’ve been established. As such, it’s not uncommon for Trustees and Beneficiaries alike to wonder how to withdraw money from a Trust Fund. The following blog explores what you must know about these beneficial estate planning documents and how a Medina County, Ohio Trust preparation lawyer can assist you through this process.
What Is a Trust Fund?
A Trust Fund is an account created that houses different assets and funds. The person who establishes the Trust, the Grantor, will leave specific wishes on handling these assets. A Grantor will appoint someone to oversee, manage, and distribute the assets inside the Trust. This person, known as the Trustee, will allocate the funds according to the wishes of the Grantor. Most generally, these are distributed to Beneficiaries.
Generally, Trust Funds are used for tax and financial protection for the assets held inside of it. Additionally, they allow the Grantor to financially provide for their loved ones throughout their life and after they’ve passed.
Who Can Withdraw Money from a Trust Fund?
Unfortunately, many who are named Beneficiaries of a Trust assume they can receive the money as they please. However, this is not true. The only person who can access and withdraw funds from a Trust are the Trustees.
Generally, the Trustee is often advised as to how they are to distribute assets. This includes making a one-time, lump-sum payment or staggered payments, which are distributed on a schedule or when a milestone is reached. It’s also important to note that some Grantors give their Trustee discretionary power over the Fund. This allows them to make withdraws and distribute assets as they see fit. The Trustee must make decisions based on the best interest of the Trust.
If you are a Beneficiary, you must understand that you can request funds from the Trust through the Trustee. However, they do not have to grant this request.
It’s also important to understand that if a Trustee is found using funds for their own personal benefit or mismanaging these assets, they can be removed from their position by the Grantor or the courts.
How Can an Estate Planning Attorney Help Me?
As you can see, there are many considerations that must be made if you are creating a Trust Fund. Ensuring you carefully detail your wishes can help avoid confusion when your assets are being distributed to Beneficiaries. An estate planning attorney can help you create a Trust that reflects your wishes and needs so you have the peace of mind necessary to know you will be able to provide for your loved ones.
At Krause Law, we understand how complex estate planning can be. That’s why we’re dedicated to helping you navigate these confusing situations to make this as simple as possible. Contact our firm today to learn how our competent and compassionate team can assist you.
