Can a trustee withhold money from a beneficiary?
Can a trustee withhold money from a beneficiary?
Yes, a trustee can withhold money from a beneficiary. However, there are some conditions that would make a withholding of funds against the beneficiary's wishes illegal.
The first requirement is that the beneficiary must be under the age of 25, which means they're still a "minor." Minors can't be held responsible for their actions, because they're not yet able to understand what they're doing. When you become an adult, you're held accountable for your actions and you have to take responsibility for them. For example, if you accidentally cause physical harm to yourself or another person because of something you did that was negligent or reckless, it's the adult version of you who will likely be held liable.
Under the law, this inability to understand what you're doing also applies when it comes to money. This means that a trustee can prevent minors from making certain decisions about their money—like how much to spend and on what—because it wouldn't be in their best interests as a minor.
A trustee is responsible for administering estates and trusts. The duty of the trustee is to act in the best interest of the beneficiary, and to avoid conflicts of interest. The trustee may have no discretion to refuse to pay a beneficiary's claim or petition. As long as the trust or will states that this is the case, then it must be paid. If there is no designation of a person other than the trustee to handle the funds, then this is not possible.
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Disclaimer: This is not legal advice and is simply an answer to a question and that if legal advice is sought to contact a licensed attorney in the appropriate jurisdiction.
