Areas of Practice      About      News      Resources      Videos      Contact      
PH: 949.553.1066FX: 949.553.2477
PH: 949.553.1066

Questions Answered About the Distribution of Trust Assets

The distribution of trust assets depends on the kind of assets to be distributed to beneficiaries. We will focus here on the general rules concerning the distribution of trust assets depending on the type of assets to be distributed to beneficiaries.

Cash assets
The distribution of trust assets in the form of cash is the easiest way to distribute trust assets because the trustee can just write checks to the beneficiaries for the amounts they are entitled to receive under the terms of the trust.

Real estate assets
The easiest way for the trustee to distribute real estate assets is to sell the properties and distribute the cash proceeds to beneficiaries. However, if the trust provides that a certain real property is to be given to a certain beneficiary, the trustee must complete a deed and transfer the property from the trust's name into that beneficiary's name.

If the trust provides that a certain property is to be given to several beneficiaries in certain percentages of ownership, the trustee must complete several deeds of trust to match the percentages of ownership for the beneficiaries. Of course, if all the beneficiaries agree, the trustee could sell the property and distribute the cash proceeds to the beneficiaries according to their percentages of ownership.

Stocks and bonds
The distribution of trust assets in the form of stocks and bonds can be done by selling these assets and dividing the cash proceeds among the beneficiaries.

These assets can also be transferred out of the trust without being sold if the trustee sets up new brokerage accounts in the name of the beneficiaries or the beneficiaries themselves can create their own brokerage accounts at the institutions that they select.

Business interests
A business interest can be transferred out of the trust and to the beneficiaries by using a stock certificate and an assignment to the beneficiaries.

Life insurance and pension assets
Such assets may pass by beneficiary designation. They don't need to be included in the trust. However, if they are included in the trust, the beneficiary designations for each asset determines who gets them.

Bank accounts
The distribution of trust assets in the form of bank accounts depends on how the accounts were owned by trustor at the time of his death.

The simplest way to leave a bank account to someone is to name that person as the "payable-on-death" or POD beneficiary. The banks supply such form and they keep it in their files. Such accounts are not part of the probate estate and they can be transferred without the court's approval. The POD beneficiary can claim the account by simply going to the bank with a death certificate and identification.

For a jointly owned account, after one person dies, the surviving co-owner will automatically become the sole owner. The account will not need to go through probate before it can be transferred to the survivor. Most bank accounts that are held in the names of two people carry with them what is titled the "right of survivorship." This means that after one co-owner dies, the surviving owner automatically becomes the sole owner of the account.

A person can also leave a bank account in a living trust and name a beneficiary for that account. Upon the person's death, the trustee will transfer the bank account from the trust's name into the beneficiary's name.

Tucker Cheadle is an attorney and a tax expert. He has acted as a fiduciary, trustee, executor, and administrator on more than 70 trusts and wills. Cheadle Law continues working with clients year over year because of the skill and expert handling of all trust matters including tax returns, administrating trusts and the overall management of the clients' trust.

With over 30 years of experience, Tucker Cheadle and his team of accountants and paralegals will help you make the best decisions as to the distribution of trust assets. Call Tucker Cheadle at 949-553-1066. He will go over your options, and help you get clarity to make wise future decisions about how to distribute a trust estate.

A review of any materials on this web page, any preliminary comments or an introductory meeting does not constitute legal, income tax or accounting advice upon which reliance can be placed. The attorney client relationship can only be created by a written retainer agreement following a check of potential and actual conflicts of interest with other clients.
Copyright 2003-2024 Cheadle Law. All Rights Reserved.
Trust Administration and Taxation Lawyer

Serving: Newport Beach, Irvine, Tustin, Orange, Fullerton, Aliso Viejo, San Juan Capistrano, Laguna Niguel, Laguna Hills, Laguna Beach, Lake Forest,
Mission Viejo, Rancho Santa Margarita, Dana Point, San Clemente, Costa Mesa, Fountain Valley, Santa Ana, Huntington Beach, Long Beach, Los Angeles,
San Francisco, Santa Clara, Sacramento, Monterey, Phoenix, Scottsdale, Las Vegas, Reno