What Is The Difference Between A Trustee And A Beneficiary?
The beneficiaries of a trust are people or entities that the grantor (the person who created the trust) wants to support. The grantor usually indicates what the beneficiaries are supposed to receive and when, in a written document. The trustee manages the assets of the trust until the trust is distributed to the beneficiaries.
The Beneficiaries Are The Ones Due To Receive The Trust Assets
Trustees are supposed to treat trust beneficiaries fairly and take actions that benefit the Trust rather than themselves. Despite this, some Trustees are guilty of taking Trust assets to themselves or using them for personal gain. While it is not always possible to know the value of a Trust’s assets prior to making distributions, trustees can find out how much their trust is worth by talking with professionals (e.g., accountants, appraisers) and communicating with beneficiaries. Once they know the value of the Trust’s assets, Trustees can then decide how to distribute them to their beneficiaries.
The Beneficiaries Do Not Manage The Trust Assets
If you have been named as a beneficiary of a trust, you should immediately review the terms of the trust and learn how it is to be administered. When a trust is in place, it has a trustee who has a fiduciary duty to administer the trust in strict accordance with the terms of the trust. Trustees must distribute trust assets as prescribed by the terms of the trust, whether that be in one lump sum or over time. The trustee must also provide a final accounting to all beneficiaries of the trust. If a trustee is not making due and proper distributions of trust property, you should speak to a probate lawyer to learn your rights as a trust beneficiary.
The Beneficiaries Have No Power To Change The Trust Assets
The beneficiaries of the Trust are not able to change the assets within the Trust. Generally, the only way to modify a trust is through a modification petition filed in the courts. This type of modification is usually a good choice when the trust is created by someone who is deceased, and the beneficiaries want to change the terms of the trust to reflect changed circumstances. If the beneficiaries of the Trust agree to the changes, then a court will likely approve the modification. However, this process is almost never easy.
Categorised in: Asset Protection, Estate Planning