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Trust fund disbursement options to consider

On Behalf of | Feb 6, 2023 | Estate Planning

When you establish a trust as part of your estate plan, you need to determine how you want that trust disbursed to the beneficiary. If you lack experience with trusts, you may not realize how many options you have for disbursement.

No matter what your goal might be, there is a disbursement option that will fit your trust.

Age-defined disbursement

If you want to prevent the beneficiary from receiving the funds until they reach a specific age, an age-defined disbursement is the best solution. Clearly define the age requirement for the beneficiary to receive the funds so that the trustee has clear instructions about the disbursement.

Milestone disbursement

You can also define specific milestones for the disbursement of trust funds. For example, you can designate a portion of the fund for when the beneficiary graduates from high school or college. You can also designate part of the fund when they buy a home or have a child. Consider the milestones that could benefit from disbursement and establish a clear schedule for the trustee.

Need-driven disbursement

If you appoint a trustee whose judgment you trust, a need-driven disbursement clause allows the trustee to determine when to disburse money. The beneficiary can request funds from the trustee as needed and for any reason, at which point the trustee can decide if that is a valid reason to draw from the trust.

These are just a few of the many ways to establish disbursements from a trust. Consider your beneficiary, your trustee and the goals you have for the trust before you decide.