How to Pay a Beneficiary From a Trust

by John Csiszar ; Updated July 27, 2017

A trust is a legal document that specifies how assets are to be held and distributed. A beneficiary of a trust is someone who is entitled to distributions from the trust. However, even if a beneficiary is entitled to receive a trust distribution, he is not authorized to simply take the money out of the trust. The responsibility for trust distributions lies with the administrator or executor of the trust. The trust administrator also usually has limited power, as he is only able to distribute trust assets in accordance with the written instructions of the trust.

Step 1

Confirm your authority to make trust distributions. You cannot access the funds within a trust unless you are the trustee or are named as the successor trustee in writing in the trust document.

Step 2

Verify the beneficiary. As with the authorization of the trustee or successor trustee, only the trust document has the authority to name a beneficiary. Confirm that the intended beneficiary is entitled to a share of the trust.

Step 3

Read the trust instructions. Some trusts call for distributions of a certain dollar amount. In others, a full distribution of all trust assets is required. As the trustee or other authorized representative, you are bound by the specific written instructions of the trust.

Step 4

Calculate the distribution. A trust might often have two or more beneficiaries. If you face the task of distributing the entire trust to all beneficiaries, first derive a value of trust assets. You might have to divide the trust assets equally among beneficiaries, or you might have to distribute a certain percentage to specific beneficiaries.

Step 5

Collect financial information from the beneficiaries. To distribute trust assets, you will have to find a way to get those assets to the beneficiaries. Some beneficiaries prefer a check mailed to their home address, while others might ask for an electronic transfer to their bank account. Depending on the instructions of the trust, you might have to set up a regular transfer of money from the trust to the beneficiary. You will need account and delivery information from a beneficiary to properly distribute the trust assets.

About the Author

After receiving a Bachelor of Arts in English from UCLA, John Csiszar earned a Certified Financial Planner designation and served 18 years as an investment adviser. Csiszar has served as a technical writer for various financial firms and has extensive experience writing for online publications.