A beneficiary is a person or group of people to whom the trust is made to benefit. Often, we see assets passed down to the trustor’s children, families, and charitable causes. The trust avoids probate and protects the beneficiary by simplifying the transfer of assets and may also establish tax protections for their inheritance.
The trust should also designate who is to receive the assets in the trust after the death of the trustors, called the remainder beneficiaries.
The trust will also designate when and how the beneficiary will receive the assets in trust. The most common condition is an “Age Restriction Trust”, which designates the assets to be held for the beneficiary until they reach age eighteen or a determined age. While the beneficiary is under eighteen the trustee manages the assets and makes distributions as they see fit for “Health, Education, Maintenance and Support”.
If the trust fails to mention any of these important terms or they are unclear, then the beneficiaries of the trust will need to come to an agreement with the trustee. If they can’t reach an agreement, then it will have to be litigated in court.