Can a Trustee Withdraw Money From a Trust Fund in California?

managing a trust fund

When you plan your estate, there are a number of decisions you must make that require placing a significant amount of trust in a number of individuals. From picking the executor of your will to granting power of attorney to someone to make your medical decisions, there are many things you must carefully consider. This is especially true if you have established a trust, as you must appoint a trustee. Keep reading to learn more about this position, like if a trustee can withdraw funds and what their other responsibilities are. You’ll also discover how a Woodland Hills trust attorney can help you navigate this process.

What Is a Trust Fund?

A trust fund is a popular estate planning tool that allows the creator to hold and set aside assets for the beneficiaries named in the document. The creator of the fund, referred to as the grantor, will appoint someone to oversee the distribution of the funds. This administrator is called a trustee and will manage the assets until they can be delivered to the inheritors in the will, known as the beneficiaries.

Traditionally, the two main kinds of trusts established are revocable, which can be modified while you’re alive, and irrevocable, which is permanent and cannot be altered.

When Can a Trustee Withdraw Funds?

In most instances, trustees are allowed to withdraw funds from the account in order to repay several expenses relating to the trust. For example, they can withdraw funds to pay for the following:

  • Funeral expenses for the creator or a beneficiary
  • Expenses for properties listed in the trust, like taxes or maintenance
  • Paying the creator’s debts
  • Hiring another person for estate administration responsibilities
  • To make investments on behalf of the grantor and trust

It is important to note that in California, trustees are supposed to access the account and use funds in relation to the estate and trust they are managing. However, it is also vital to understand that most trusts explicitly forbid a trustee from borrowing money from the account. If this is not specified, a trustee may borrow money from the account without realizing it could be considered misconduct. This means they could be held liable for misused funds and relieved of their duties.

If a trustee wishes to loan a beneficiary money, they may do so if the terms of the trust do not explicitly forbid this practice. Some creators may prohibit beneficiaries from receiving loans from the trust, as it could be seen as favoring one inheritor over others.

When you have questions about your estate plan, the best thing you can do is contact an experienced attorney as soon as possible. At the Law Offices of Yacoba Ann Feldman, we have the experience necessary to help you navigate any challenges you may have with your trust fund. Contact us today to learn more about how we can help you through this challenging time.

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