If you have been named as the beneficiary of a trust, the implications of this will vary depending upon the kind of trust created and any conditions that were placed upon the transfer of trust assets in the trust document.
In many cases, a settlor will create a living trust for the primary purpose of transferring trust assets outside of the probate process. If this is the case, then the trust administrator who was designated in the trust document will begin the process of administering the trust after the death of the settlor. The trust administrator will take care of providing notice to the beneficiaries, addressing tax issues and facilitating the legal transfer of the trust assets to you as the trust beneficiary. You should become the new owner of the trust assets when the trust administration process is complete.
In other circumstances, however, things may become more complicated. For example, your loved one may have created a spendthrift trust with the goal of preventing you, as the trust beneficiary, from spending the money left to you too quickly or from losing the assets in the trust.
If a spendthrift trust was created, you are not going to be able to receive an inheritance, take ownership of trust assets and spend the assets as you see fit. Instead, you will receive income or principal from the trust according to specific instructions that the trust settlor created and you will not be able to control the trust assets at all. You will have to live with receiving the trust assets as doled out by a trustee who has a fiduciary duty to manage the trust assets for your benefit in a responsible way.
Some trusts will allow you to take direct ownership of the trust assets, but only after certain conditions are met – such as graduating from college or getting married. If you stand to inherit from a trust that has conditions like this, you should make sure you are aware of exactly what you must do in order to inherit and you should work with an experienced attorney to find out how you can move forward with obtaining the trust assets after you have met the conditions.
Whether you stand to inherit right away and take ownership of trust assets after the trust administration or whether you need to wait to inherit or will receive your inheritance doled out over time, you need to make sure you understand your rights. You also need to ensure that the designated trustee is fulfilling his or her duty and protecting trust assets. The attorneys at SinclairProsser Law can help you take appropriate steps to protect your inheritance and to ensure you can inherit in as timely a manner as possible.
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