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Ely, Counselor at Law
Category: Estate Law
Satisfied Customers: 102523
Experience:  Fully licensed attorney in Texas in private practice.
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Can a trustee impose requirements on a beneficiary, before

Customer Question

Can a trustee impose requirements on a beneficiary, before distributing funds from the trust, if such requirements are not stated explicitly in the trust? Example: requiring a copy of grades from current semester of school before funds will be paid from an educational trust, when tuition must be paid far before a semester ends, after which grades are given out?
Submitted: 1 year ago.
Category: Estate Law
Expert:  Ely replied 1 year ago.

Hello and welcome to JustAnswer. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.

Generally speaking, no. A Trustee cannot demand extra requirements that are not specifically stated in the trust instrument.

However, there are some situations where a trustee's requirements may be reasonable if the requirement seeks to confirm that the action/occurrence that allows the distribution has been met. What do I mean by that? Let us use the grades matter as an example. If the trust says that "$25,000 shall be given out once the beneficiary acquires 60 hours of college credit," then then the Trustee may seek verification that the beneficiary has indeed completed 60 hours. This does not necessarily have to be in the form of grades, but some kind of proof that 60 hours of college credit has been acquired. The trustee may believe that a grade printout is the only way to get this confirmation as it would also list the hours, but if the college is able to provide some kind of other statement to the 60 hours being met, then the grades are not required - only that statement.

However, if the trust instrument states that "$25,000 will be paid out only if the beneficiary receives no grades below a B or its equivalent," then the Trustee has a right to demand said grades.

As you can tell, it is a bit subjective. If the beneficiary feels that the Trustee is demanding more than the trust requires but the trustee will not budge, the beneficiary can threaten to go to Court to have the Judge clarify what is required under the trust, after looking at the verbiage an surmising what the benefactor's intent was.

I hope this helps and clarifies. Please use the SEND or REPLY button to keep chatting, or please RATE when finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of TOP THREE FACES/STARS and then SUBMIT, as this is how experts get credit for our time. Rating my answer the bottom two faces/stars (or failing to submit the rating) does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith with a positive rating.

Expert:  Ely replied 1 year ago.

Hello again. This is a courtesy check in to see if you needed anything else in regards ***** ***** question. I am simply touching base. Let me know. Thanks!