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What you should know if you’re the beneficiary of a trust

Often when people use trusts to leave money to family in their estate plans, they don’t designate specific dollar amounts. They will designate that whatever assets are in the trust at the time of their death be divided — sometimes equally and sometimes not. If you’re the beneficiary of a trust, finding out how much you’ll receive may take some research — and patience.

It’s also important to determine when you’re entitled to your share of the trust assets. Often a trust will read something like “distributions shall be made upon the settlor’s death.” That means that once the estate debts, expenses and taxes are paid, the remaining assets will be distributed.

In some cases, however, the trust grantor places conditions on the distribution of trust assets. For example, they may designate that a beneficiary needs to have reached a certain age. The funds may have to be used for specific purposes, like college.

Often, grantors will designate that the assets in a trust be divided equally among their children. In these cases, they’ll add a clause that if a child predeceases them, that child’s own kids will get an equal portion of their parent’s share of the estate.

Distributions from a trust are typically managed by a trustee who’s chosen by the grantor. They’re required to act according to the instructions provided by the grantor. Some are given more discretion than others.

It’s generally best when people develop an estate plan if they let their family know, at least in general terms, how they are choosing to distribute their assets. Unfortunately, people don’t always get around to having these conversations. Sometimes, particularly if they fear their decisions will be unpopular, they intentionally leave their loved ones in the dark.

If you’re the beneficiary of a trust, and you have questions or concerns about your inheritance, you may want to start by talking with the trustee. If you’re not satisfied with the answers you’re getting, you may want to seek the guidance of an estate planning attorney.

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