If you are a beneficiary of a trust, you probably think of it as your trust. It isn’t. It is a trust for your benefit.
You may wonder when you are going to get your money. It isn’t your money. It’s the trust’s money. Most trusts do not have mandatory distributions: you have no right to a distribution. You do, however, have the right to be considered for a distribution.
Responsibilities of being a beneficiary of a trust
As is often the case in life, that right is paired with responsibilities.
- You may be required to submit documentation showing your living expenses and standard of living.
- If you are a beneficiary of a trust providing for your “support and maintenance,” you must spend the distributions for the purposes for which they are given.
- If you are a beneficiary of a trust which requires that you be in school or working, that you be clean and sober, or has some other requirement, you must submit documentation showing that you are – and maybe submit to drug testing and enter rehab.
If you spend trust distributions on things for which they were not intended, the trustee has a right to recover those amounts either directly or by reducing future distributions. This is a right at common law, codified in the Texas Trust Code.
You may not like the trustee’s decisions. But you have to live with them.
If you are 25 or older, you are entitled to an annual accounting. If things seem amiss, you should consult an attorney experienced in trust administration. But beware of biting the hand that feeds you: it could be costly.
Elder law attorney, Terry Garrett, is a member of the National Academy of Elder Law Attorneys and is an Approved Guardianship Attorney. She assists people in elder law, estate and special needs planning, guardianship and settling estates. She graduated with honors from Cornell University. She was on the Dean’s List at Wharton Business School. She earned her J.D. at Columbia Law School, receiving the Parker Award and a Mellon Fellowship.