To properly loan money to a Trust, a Trustee needs to act carefully and take a few extra steps. The Trustee has two choices when entering into transactions with the Trust. They can either (1) obtain consent from the beneficiaries, or (2) obtain permission from the court.
Can trustees make gifts?
By requiring your Trustee to appoint an independent special trustee to authorize gifts in excess of the federal gift tax exclusion amount, you can be assured that these gifts will not be made unless it is in the best interests of both you and your beneficiaries.
What happens to the principal of a trust fund?
The trustor maintains the right to collect fixed payments from the trust fund while giving the principal to a beneficiary after a stated time or at the trustor’s death.
How is a trustee required to administer a trust?
Let’s start with a basic understanding of the trust law we will apply to this problem. Under Probate Code section 16000, a trustee has a duty to administer the trust according to the trust instrument. This duty requires the trustee to distribute trust assets to the beneficiaries as mandated by the trust document.
What are the Fiduciary principles of a trustee?
“Fiduciary principles” essentially means a trustee is supposed to act like a reasonable person would in similar circumstances—in other words: be fair. Let’s consider a hypothetical situation to demonstrate the problems that arise and the options you have when confronted with a California trustee who fails to distribute trust assets.
Who is responsible for the management of a trust?
A trust is a legal entity into which you transfer ownership of your assets to be used by your future heirs. It is an estate planning option that often works in conjunction with a last will and testament. All trusts are managed by a trustee, who can be a family member, attorney, or even a financial institution, which is called a corporate trustee.
