Ramona Bowl, CA asked in Estate Planning for California

Q: beneficiaries who would like partial payment before the 120 day notification is up. Is there a waiver they can sign

Living trust to issue partial payment to beneficiaries from condo sale before 120 notice is met

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2 Lawyer Answers
James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Estate Planning Lawyer
  • Sacramento, CA
  • Licensed in California

A: In California, when managing a living trust and considering the early distribution of assets, such as proceeds from the sale of a condo, to beneficiaries before the typical 120-day notification period has ended, there are several factors to keep in mind. First, it's important to review the specific terms of the trust agreement. This document may contain provisions regarding early distributions or conditions under which they can be made.

If the trust allows for early distributions, or is silent on the matter, trustees have a degree of discretion in handling trust assets. However, trustees must always act in accordance with their fiduciary duties, prioritizing the best interests of the beneficiaries and the intent of the trustor.

Beneficiaries who wish to receive partial payment before the 120-day period can request this from the trustee. In such cases, it is advisable for the trustee to obtain written consent from all beneficiaries who are affected by the early distribution. This consent can serve as a form of waiver, acknowledging and agreeing to the early payment.

It's also crucial to ensure that any early distribution does not compromise the ability of the trust to fulfill other obligations, including debts, taxes, and distributions to other beneficiaries. Consulting with an attorney familiar with trust administration in California can provide guidance tailored to the specific circumstances of the trust in question. This can help in navigating any potential legal or financial implications of early distributions from the trust.

Klaus Gottlieb
Klaus Gottlieb pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • Estate Planning Lawyer
  • San Luis Obispo, CA
  • Licensed in California

A: If beneficiaries of a living trust wish to receive a partial distribution of trust assets, such as proceeds from the sale of a condo, before the 120-day notification period has elapsed, there are a few considerations:

Trustee Discretion: The trustee has the discretion to make distributions. However, the trustee must act in accordance with the trust document and the best interests of all beneficiaries. The trustee should be cautious about distributing assets before the end of the notification period, as it could potentially expose them to liability, especially if there are later contests or claims against the trust.

Waivers: Beneficiaries may sign a waiver to receive early distributions. This waiver should be carefully drafted to ensure it adequately protects the trustee from future claims related to the early distribution. It should explicitly state that the beneficiary is aware of their right to contest the trust and is choosing to receive a partial distribution before the end of the notification period. It's advisable to have these waivers drafted or reviewed by an attorney.

While beneficiaries can potentially receive a partial payment before the 120-day notification period is up, it involves risks and should be approached with caution and legal guidance. Waivers can be used but must be carefully drafted to protect the interests of all parties involved.

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