Reasons Why You Would Not Be Able to Access a Trust Fund
Trust funds provide a person with a means of allocating her assets according to how she wants them to be used. If that person dies, having a trust fund in place allows the use of the assets to continue without interruption, and it can help reduce estate taxes. Creating a trust fund is easy. You meet with a financial officer and outline what you want to accomplish with your assets. The financial official will explain how that can be accomplished. An attorney will draw up the trust agreement, and then the assets are delivered to the fund.
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Trust Doesn't Allow You Access
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One reason you may not be able to access your trust is that although the trust was set up for your benefit, you were not named the trustee, only the beneficiary. In situations where the beneficiary is mentally or physically incapable of caring for himself, the trust may been set up naming a beneficiary and naming someone else, generally a sibling, as the trustee. The trustee will then make sure that trust's assets are used to provide care for the incapacitated beneficiary.
Not of Age
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When parents establish a trust for their minor children, a common restriction placed on the trust is that the beneficiary can't access the money until they reach adulthood, usually at age 18 or 21. At this point, the thinking is that beneficiary will be an adult and capable of making sound financial decisions about the use of the money.
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Spendthrift Trust
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In situations where the person who established the trust has concerns that the beneficiary will not be responsible with the money even as an adult, a spendthrift trust may be established. This type of trust has a trustee who will decide when distributions from the trust are made and make sure that they are made in the best interests of the beneficiary.
Outside Time Window
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Some trusts allow the beneficiary to make withdrawals only at certain times. This is because the trusts investments allow limited access to the funds, so the trust must allow the beneficiary only limited access. One example of this is a money market common trust. Withdrawals are allowed at the end of the month only once the money market's share have been re-priced to the market.
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