If your loved one designated you as a trustee, then you hold a certain fiduciary duty. Such duty requires you to act in the best interest of your loved one’s trust and its beneficiaries. With this, you may be wondering how you can justifiably withdraw money from your loved one’s trust fund. Follow along to find out whether you are allowed to withdraw money and how one of the proficient Butler County trust fund attorneys at Heritage Elder Law & Estate Planning, LLC can help you in this determination.
What is a trust fund?
First of all, a trust fund involves three parties: a grantor who puts the assets into the trust, a beneficiary who receives the assets, and a trustee who manages the assets.
Put simply, a trust fund is used to guarantee that a grantor’s assets are protected and that they are distributed to beneficiaries as directed. For example, if a grantor does not want a beneficiary to receive their assets until they reach the age of 18, a trustee will ensure that they remain under safe supervision in the fund until they become of age.
As a trustee, am I allowed to withdraw money from a trust fund?
To reiterate, the main responsibility of a trustee is to manage the assets that have been placed in a trust and then transfer them to a beneficiary. So, if you are a trustee, you can execute this by establishing a bank account for the trust that only you have access to. You can then use this bank account to write checks, schedule Automatic Clearing House transfers, schedule wire transfers, and most notably, withdraw cash.
That is, you may need to withdraw cash from the trust for third-party expenses that you are responsible for, such as the following:
- Funeral and burial costs of the grantor.
- Costs related to properties included in the trust (i.e., property repairs, property insurance, property tax, etc).
- The cost of any debts still owed by a grantor.
- The cost of any taxes still owed by a grantor.
- The cost of any professionals hired for administrative tasks for the estate.
Though you are allowed to make withdrawals, you are responsible for keeping track of all the money that has been taken from the trust.
What else am I allowed to do with money from a trust?
As a trustee, you are also allowed to use money from a trust fund to make investments and pay its associated fees. However, you must only do so if these investments will benefit the trust and its beneficiaries.
For more information on how to handle money as a trustee, you must consult with one of the talented Butler County estate planning attorneys today.