How to Dispense Funds From a Living Trust
One of the primary purposes for creating a trust is to provide some type of financial benefit to the beneficiaries of the trust. The trustee can provide this benefit by making disbursements of money or property from the trust. In an ideal situation, the disbursements come from income earned on the trust property, but sometimes the trust property must be invaded to provide funds for disbursements.
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Instructions
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How to Disburse Trust Funds
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1
Read the trust document to make sure the disbursement you want to make is authorized.
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If authorized, check to see if there are any limitations, restrictions, or specific instructions relating to how and when to make the disbursement.
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3
If you want to dispense cash, you will most likely need to arrange for some of the trust property to be sold or liquidated.
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Contact the beneficiary to arrange for the physical transfer of the trust funds. This can be accomplished, for example, in cash, by check, or by electronic funds transfer.
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Remove the disbursed property from the trust schedule, since the dispensed property is no longer held by the trust.
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Tips & Warnings
The trust document provides the legal authority to manage and dispense trust property. You should periodically review the trust document, and certainly review it before taking any major actions, to make sure you are complying with its terms.
If you take any action that violates the trust, such as dispensing property that should not have been dispensed, or dispensing funds to an unauthorized person, you could be legally liable for damages to the trust beneficiaries. If you have any questions on your authority, consult an estate-planning attorney.
