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Heritage Tree LogoHow Do I Know When to Withdraw Money from a Trust?

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As a trustee, you are obligated to perform many tasks surrounding the grantor’s estate. This includes withdrawing money from their trust and using it for necessary expenses or aiding beneficiaries. However, this action must be done at the appropriate time. Read on to discover the right time to withdraw money and how one of the seasoned Butler County trust attorneys at Heritage Elder Law & Estate Planning, LLC can help you understand your responsibilities.

As a trustee, how do I know the right time to withdraw money from a trust?

First of all, a trust is a legal entity that allows a grantor to transfer their assets to your ownership, as the designated trustee. From here, you are obligated to manage the assets on behalf of the grantor’s named beneficiaries. This may entail withdrawing money from the trust to pay for third-party expenses. Generally speaking, such expenses are as follows:

  • The grantor’s funeral and burial expenses.
  • The grantor’s property expenses (i.e., home repairs, property insurance, etc).
  • The grantor’s remaining taxes and debts on their estate.
  • The fees of professionals who handled administrative tasks for the grantor’s estate.

What’s more, you may withdraw money from a trust to initiate investments, with certain exceptions being possible. Above all else, you may take this money and distribute it to the named beneficiaries.

With all that being said, the appropriate time to withdraw money from a trust is whenever legitimate third-party expenses arise. Or, when it comes to distributing money to named beneficiaries, this must be done at the exact time disclosed by the grantor.

As a trustee, what are my responsibilities when withdrawing this money?

You must understand that, as the designated trustee, you are bound by fiduciary duty. This means that you are required to work in the best interest of the grantor’s trust and their named beneficiaries. In other words, you cannot just withdraw money from the trust for any reason you want. Otherwise, this may be considered a breach of fiduciary duty, and the named beneficiaries may have grounds to file a claim against you.

This means that, if you withdraw money from a trust to make investments, then you must ensure that these investments are to benefit the named beneficiaries in some way. This also means that you must distribute this money to named beneficiaries according to the exact terms and conditions the grantor has set out, and this is regardless of whether you disagree with these instructions.

You must not hesitate to embrace your role as a trustee. As soon as you can, pick up the phone and call one of the competent Butler County estate planning attorneys. Someone at Heritage Elder Law & Estate Planning, LLC will be happy to answer.

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