What should I know if I want to withdraw money from a trust in Pennsylvania?

woman at desk with money and calculator

If you’re the beneficiary or trustee of a trust fund, you may wonder how to access the money left in this account. Unfortunately, many people are unsure how or when to withdraw money from a trust after being named a beneficiary or trustee of the fund. The following blog explores what you must know about these circumstances and how PA trust attorneys can help with any issues you may encounter when navigating a trust. Keep reading to learn more about the process of withdrawing funds.

What is a trust fund?

A trust fund is a legal account that holds money and assets for named beneficiaries, and they are managed by an appointed entity known as the trustee. The person who established the trust, or the trustor, will determine how these funds are managed and distributed, and the trustee is responsible for fulfilling the wishes.

Essentially, this means a beneficiary cannot access the fund and withdraw money like it is a personal bank account. Instead, the trustor will distribute the funds according to the instructions of the trustor. This could be lump-sum gifts, staggered distributions, or discretionary distributions, which grant the trustee discretion when distributing assets.

When can I withdraw money from a trust?

If you are the trustee of a fund, it’s necessary to understand that while you are likely the only person who can withdraw money, you must do so in accordance with the wishes and rules set by the creator of the trust. It is your duty to ensure you adhere to the wishes of the trustor. This includes paying debts, estate taxes, maintenance fees, and making investments on behalf of the fund. However, the trustee cannot take funds out of the account for their own personal benefit without explicit permission from the grantor. If they disregard their fiduciary duty,  they can be removed from their appointed position.

A beneficiary cannot access funds without approaching the trustee. If you are a beneficiary, you must submit a written request for the funds. It is up to the discretion of the trustee whether or not to grant this request, as they must abide by their fiduciary duties to the trust. Depending on your circumstances, this may be possible. It is also important to note that if a trustee is abusing their power, you may be able to petition the court to have them removed. However, this can be a long and drawn-out process.

If you have questions or concerns about a trust you were named a trustee or beneficiary of, or you are looking to establish a trust fund, it’s in your best interest to contact an experienced attorney as soon as possible to assist you. Unfortunately, trusts can be incredibly complex, so ensuring you have someone well-versed in these legal matters to guide you through this process is essential. Contact the dedicated team at Friedman Schuman today to learn how we can assist you.

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