Every Trust has written direction to the Trustee that sets forth how the Trust assets must be distributed to the Trust beneficiaries. Sometimes the assets are set to pass “outright and free of trust.” That just means the beneficiaries receive the assets in their own name. For example, if the Trust has 100 shares of Apple stock and the Trust requires the shares to be distributed to a single beneficiary “outright and free of Trust,” then the Trustee would transfer the Apple stock to that beneficiary–easy enough.
Other Trusts require the assets to remain in Trust but require the Trustee to make distributions of income and principal for the beneficiary’s health, education, maintenance, and support. This is referred to as an ascertainable standard. The Trustee is supposed to ask the beneficiary what they need for their education, health, and support needs and then make distributions to meet those needs.
Unfortunately, all too often bad Trustees simply refuse to follow the Trust terms. They refuse to make outright distributions, they fail to inquire as to a beneficiary’s support needs, and then they fail to make distributions to meet those needs. It can all be a big mess when a Trustee fails to follow the Trust terms.
In the video below, we discuss what you can do when a Trustee fails to follow the Trust terms. You don’t have to accept a bad Trustee doing the wrong things. You have the right, as a Trust beneficiary, to take action and stand up for what you are entitled to receive under the Trust document.
