Experienced Trust & Estate Counsel Helping Individuals and Businesses
Legal Representation In Burlingame, California

When should the trustee distribute your trust? 

On Behalf of | Apr 24, 2020 | Trust Administration |

When you put your money into a trust to leave to your heir, did you know that you can actually choose when the trustee should distribute it? Sometimes, people base this on events, such as saying the money is to be used for college and can be given to the heir or directly to the school when tuition is due. 

In other cases, though, the whole goal of the trust is to delay the distribution until a certain time — usually when the heir reaches a specific age. For instance, if you have an heir who is a minor and you don’t want them to get the money before they become an adult, it could be paid out as soon as they turn 18 years of age. The trustee knows they simply have to wait to pass the assets on. 

Many people pick multiple ages in order to spread the money out and to delay the payments even further than mere adulthood. For instance, you could leave 15% to your heir on their 18th birthday to help them start this next chapter in their life. At 25 years of age, they could get another 15%, and the same could happen when they turn 30 years of age. This helps them with things like getting married or starting a business. Then, when they’re 35-years-old, they get the remaining 55%. 

Why do this? The hope is that they’ll use the money responsibly and that they’ll have real costs they need to meet when they get older. This can avoid some of the frivolous spending of youth. 

It is important for the trustee to know exactly how these distributions work, what obligations they have, what steps to take — and when.