Setting up a trust: 3 steps for beneficiaries
In an ideal situation, beneficiaries would understand the terms of a trust prior to the death of the grantor. But in many cases, those financial discussions don’t happen. These steps can simplify the process so it goes as smoothly as possible.
- Prepare for your trust meeting. If the grantor’s trust goes into effect upon the grantor’s death, the trustee will need to have the death certificate to start the administrative process. The trustee may have other requests or questions for you if additional assets need to be gathered. The trustee will typically work closely with you, the grantor’s attorney and the grantor’s other advisors (such as a tax accountant) to finalize funding the trust and start the administrative process.
- Meet with the trustee (or trustees). The trustee will contact you to set up a meeting to go over the details of the trust documents. During this time, it’s important to understand your rights when it comes to these assets. Be prepared to ask any questions you may have. What stipulations are there regarding when you will have access to the assets? Are there rules around what you can do with the assets? What is the process for requesting a distribution from the trust? Are any distributions automatic?
Ask the trustee to explain the details of the trust and what the provisions are for who receives the assets and how they can be used. Your trustee should help communicate why the trust was set up the way it was and will need to administer the trust in accordance with the grantor’s wishes.
- Expect to wait for assets to be distributed. Every trust is unique; that’s why it’s important to ask what you are entitled to within the trust. If assets will be distributed to you, it could take anywhere from six months to two years for them to be distributed. Or, if there are age provisions around distribution, you may need to wait until you reach a certain age to receive funds from the trust. The trust may be a lifetime trust for you with other provisions applicable at your death. Talk with the trustee about these details so you know what funds you can use and when they become available.
Whether you’re the grantor or beneficiary of a trust, knowing your specific role and what you can expect helps everything run more smoothly and ensure a more secure financial future for everyone involved.
Download the checklist PDF
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