A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.
This means that an executor can override a beneficiary's wishes if those wishes contradict the expressed terms of the will, do not comply with applicable laws, and the executor acts in the best interest of the estate and its beneficiaries.
The right to add and remove beneficiaries is a power reserved for the settlor of the trust; when the grantor dies, their trust will usually become irrevocable. In other words, their trust will not be able to be modified in any way.
Any assets a trust doesn't include can be subject to the instructions in the will, meaning a will can override a trust if the trust does not specifically include certain assets. Assets not in the trust must pass through probate.
Here's why: beneficiary designations take priority over what's in other estate planning documents, such as a will or trust. For example, you may indicate in your will you want your assets to pass to your spouse after your death.
The document creating the trust doesn't meet the legal requirements; The trust was created or modified by fraud; The creator of the trust lacked the capacity to create the trust; or. Someone exercised undue influence over the creator of the trust.
While trustees may temporarily be able to delay trust distributions if a valid reason exists for them doing so, they are rarely entitled to hold trust assets indefinitely or refuse beneficiaries the gifts they were left through the trust.
Selecting the wrong trustee is easily the biggest blunder parents can make when setting up a trust fund. As estate planning attorneys, we've seen first-hand how this critical error undermines so many parents' good intentions.
The ability of a beneficiary to withdraw money from a trust depends on the trust's specific terms. Some trusts allow beneficiaries to receive regular distributions or access funds under certain conditions, such as reaching a specific age or achieving a milestone.
Executors are bound to the terms of the will, which means they are not permitted to change beneficiaries. The beneficiaries who were named by the decedent will remain beneficiaries so long as the portions of the will in which they appear are not invalidated through a successful will contest.
Power of Attorney and Beneficiaries
Again, your power of attorney can only do what's set forth in the POA instrument. If the instrument does not stipulate that your POA can change the beneficiaries of banking or retirement accounts, then he or she cannot legally do so.
Others may be lax about updating their designations when their personal circumstances change, or fail to consider how their beneficiary designations will fit in as part of their overall estate plan. Generally speaking, in order to contest a beneficiary designation, the individual must have a valid legal claim to do so.
Generally speaking, once a trust becomes irrevocable, the trustee is entirely in control of the trust assets and the donor has no further rights to the assets and may not be a beneficiary or serve as a trustee.
Typically, a revocable trust with clear provisions for outright distribution might conclude within 12 to 18 months. However, in simpler cases, the process can take an average of 4 to 5 months without complications.
No, beneficiaries generally cannot override a trustee unless the trustee fails to follow the terms of the trust instrument or breaches their fiduciary duty. Even when a beneficiary disagrees with a trustee's actions, they typically cannot override the trustee just because they don't like their choices.
Trusts offer amazing benefits, but they also come with potential downsides like loss of control, limited access to assets, costs, and recordkeeping difficulties.
The short answer is yes. Trust beneficiaries can bring a claim against the trustee, so long as they have a valid reason.
There is no minimum
You can create a trust with any amount of assets, as long as they have some value and can be transferred to the trust. However, just because you can doesn't necessarily mean you should. Trusts can be complicated.
Under California law, embezzling trust funds or property valued at $950 or less is a misdemeanor offense and is punishable by up to 6 months in county jail. If a trustee embezzles more than $950 from the trust, they can be charged with felony embezzlement, which carries a sentence of up to 3 years in jail.
If you are the designated beneficiary on a deceased person's bank account, you typically can go to the bank immediately following their death to claim the asset. In general, there is no waiting period for beneficiaries to access the money; however, keep in mind that laws can vary by state and by bank.
A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries. Trust assets are meant for the benefit of the trust beneficiaries and not for the personal use of the trustee.
Wills can also take care of issues that your trust can't—notably, guardianship of your minor children and instructions about what happens to any pets you may have.
Trustee malfeasance refers to any type of negligent, self-serving, erroneous, or retaliatory conduct committed by the trustee of a trust resulting in harm to trust assets or beneficiaries. Trustee malfeasance is a broad term encompassing many different types of offenses, both intentional and unintentional.
Depending on the complexity of the case, it may cost anywhere from a few thousand dollars to $100,000 or more to dispute the terms of a trust.