The terms of distribution for a trust are outlined in the trust agreement (the document that governs the trust). Each type of trust has its own requirements for distributing funds. The trustees have a fiduciary duty requiring them to follow the distribution scheme in the trust agreement. But, sometimes there are unanticipated circumstances that might change the rules or the schedule for distribution of trust assets. A knowledgeable Nevada estate planning attorney can provide the guidance you need.Regulations about these exceptions can be found in this document on the Nevada State Legislature’s website.
Trustees Have a lot of Power Over Distributions
Trustees have specific duties defined in the trust agreement, but many things might be left to the discretion of the trustee. For example:
- Delaying a distribution. A beneficiary may be entitled to a distribution, but the trust agreement may grant authority to the trustee to delay the timing of the distribution. If certain events occur, the trustee may choose to exercise their discretion to delay distribution payments.
- Purely discretionary distributions. A trust agreement may provide a beneficiary with a purely discretionary interest in the trust. This allows the trustee to distribute some, all, or even none of the assets to a beneficiary.
However, if a trust agreement does not specifically grant a trustee with authority mentioned above, the trustee must make the distributions to the beneficiaries as specified in the trust agreement; the trustee does not have the ability to alter the distributions. Unless otherwise specified in the truste agreement, a trustee may not consider a beneficiary’s assets or lifestyle when making a distribution from the trust.
If you think that you are entitled to a distribution, the best course of action might be to discuss your situation with the trustee. If the trustee seems unwilling or unable to explain when or why a distribution will be made (or why a distribution to which you are entitled has not yet been made), you may want to contact a trust and estate lawyer familiar with Nevada laws about trust distributions. A beneficiary always has the right to petition the court for review of any distribution or lack of distirbution.
When the Nevada Court will Force a Distribution
Interested parties (e.g., trustees, beneficiaries, creditors) may ask the Nevada court to modify, terminate, or force a distribution of a trust if continuing the trust is no longer feasible or economical. This may occur when:
- The trust’s assets are worth less than $100,000
- The value of the trust is insufficient to justify administration costs and trustee fees
- The trustee is removed or replaced
Our Skilled Las Vegas Attorneys can Help You Negotiate or Litigate a Trust Distribution
If you are a beneficiary, trustee or creditor thinking about forcing a trust distribution, it’s very important to hire a Nevada trust and estate attorney to help you determine the best course of action for your specific situation. The attorneys at RLK can help you. RLK provides our clients better service because we focus only on trusts and estates. Within this legal niche, RLK ranks among the top firms in Las Vegas.If you have a trust or estate issue, call us at (702) 255-4552 or contact us online.