Can a Trustee Withdraw Money From a Fund in New York?

trustee withdrawing funds to manage a trust

When you establish an estate plan, you’ll put numerous people in charge of your assets. For example, you’ll need an executor to manage your will, and an agent with power of attorney can help make medical decisions on your behalf. One area of your trust you should consider is how and when a trustee can withdraw funds from an account. Keep reading to learn more about when this is possible and how a Putnam County trusts attorney can help you with any questions you may have about this process.

What Is a Trust Fund?

A trust fund is one of the most popular estate-planning tools, as it allows the creator to set funds and assets aside for their intended beneficiaries. The person who sets up a trust is called the grantor, and they appoint a person to manage and distribute the assets included in the trust. The manager of the trust is called the trustee, and they handle the assets for the beneficiaries, or the people the trust is intended for.

There are two kinds of trusts that most people will set up. A revocable trust can be modified while the creator is alive, while an irrevocable trust cannot be modified once it’s created. You can place money, stocks, property, and personal belongings, among others belongings in a trust.

When Could a Trustee Withdraw Funds From the Account?

In most instances, trustees can withdraw funds from the trust account if they will use the money for expenses related to the trust. This includes the following circumstances:

  • Funeral expenses for the grantor or their beneficiaries
  • Managing properties listed in the will, like repairs or paying property taxes
  • Making investments on behalf of the grantor
  • Paying the debts of the grantor
  • Hiring a third party to help with estate administration

Generally, so long as the withdrawn money is put toward legitimate expenses, the trustee is well within their duties to access the account and remove funds.

It’s important to understand that a trustee is not permitted to borrow or take money out of the account to use for their own personal needs. Because a trust is established for multiple people, they are not taking money from the creator, but rather taking money from all of the beneficiaries. Doing so is illegal and can result in the dismissal of their duties as a trustee.

In some circumstances, unless explicitly forbidden in the trust’s guidelines, a trustee may loan a beneficiary money. However, there may be guidelines surrounding this action, as it could leave other beneficiaries feeling slighted.

When you have questions about the estate planning process, we can help. At the Law Offices of Andres D. Gil, we understand how these can be confusing and complex matters. Contact our legal team today to learn more about how we can help you through this process.

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