In California, the Probate Code governs various types of trusts. There are revocable and irrevocable trusts, legacy trust, trust for those with special needs, and others. All of these are legal constructs that usually have named beneficiaries. Beneficiaries receive payments from the trust, or distributions, according to the trust terms. Here is more information about the types of trust distributions in California:
The California Probate Code requires that a named trustee administer a trust according to the trust instrument. This duty includes distributing trust payments to the document’s beneficiaries according to its terms. The trust may limit the trustee to making distributions only for specific purposes, such as to pay for a beneficiary’s higher education expenses. Further, trust payments may be held back until a beneficiary reaches a certain age. In the case of a special needs trust, disbursements can only be made for specific expenses that are connected to the beneficiary’s quality of life and do not interfere with his or her public benefits.
Trustee’s Broad Discretion
There can be situations where a trust grants the trustee broad discretionary powers over distributions. While this may sound as if a trustee can make payments to beneficiaries whenever he or she may like, the trustee will still be bound by his or her other duties to the trust. The trustee owes a fiduciary duty to the trust and must protect its well-being. Further, the trustee must also look out for the beneficiary’s financial interests. If the trustee believes that making a particular disbursement is not good for the trust and the other beneficiaries, he or she may have cause to refuse a disbursement.
Challenging a Trustee
Ultimately, the trustee is supposed to abide by the trust terms, be reasonable and fair with all of the beneficiaries, and protect the trust. If you are a beneficiary and believe a trustee is not using his or her discretion appropriately, you may have cause to challenge their conduct or ask for their removal. If you feel you are being mistreated by a trustee, you should contact an experienced California trust attorney as soon as possible to discuss your case.
At the Law Offices of Alice A. Salvo, we have experience with California trusts and trustee issues and can help. Schedule a free consultation today to start planning your solution.