Does the Trustee get the money in the Will?
When someone passes away and leaves a Will that includes a Trust, a common question that arises is: “Does the Trustee get the money in the Will?” This query often causes confusion among beneficiaries and families during estate administration. Understanding who gets what, when, and why can be complicated, particularly when Trusts are involved.
In this article, we explore whether the Trustee gets the money in the Will, what that means, and how Trust funds are managed and distributed.
Misconceptions
There is a common misconception that the Trustee gets the money in the Will for their use. This misunderstanding likely stems from a lack of clarity around legal terminology. In reality, when a Will creates a Trust, the Trustee is appointed to manage the assets placed in that Trust, not to personally benefit from them (unless specified otherwise).
The Trustee is a fiduciary, someone who has a legal obligation to act in the best interests of the Trust’s beneficiaries. While the Will may direct that certain assets or funds be transferred to the Trustee, these are not given to them as a gift or inheritance. Instead, the Trustee is given legal ownership of the Trust assets, which must be held and managed strictly according to the terms of the Will and the law.
When they receive funds
So, does the Trustee get the money in the Will? Technically, yes! But, only in their capacity as a Trustee, not as a personal recipient. The transfer of funds to a Trustee happens once the Will is administered and the estate has been settled, which includes paying debts, taxes, and other obligations.
The Trustee may receive:
- Cash or investments: To be held on trust and managed for the benefit of the named beneficiaries.
- Real property: Such as a house that needs to be maintained or held until a beneficiary reaches a certain age.
- Instructions: On how to use the funds, such as for the education or health of a child beneficiary.
Once the funds are received, the Trustee must follow the directions laid out in the Will or the accompanying Trust documentation. The money is not theirs to use freely but is to be used solely for the benefit of the Trust’s beneficiaries.
Role vs entitlement
It’s important to distinguish between the role of a Trustee and entitlement to inheritance. The Trustee's role is administrative and managerial. They ensure the terms of the Trust are fulfilled, the assets are invested prudently, and distributions are made appropriately.
In contrast, entitlement refers to who benefits from the Trust. Beneficiaries named in the Will are entitled to receive assets or income from the Trust. The Trustee is not automatically a beneficiary, although someone can be both a Trustee and a beneficiary. In such cases, they must carefully separate their duties from their interests to avoid conflicts.
Trustees are often entitled to reasonable compensation for their work, especially if the Trust administration is complex or ongoing. This compensation is not the same as receiving a gift or inheritance; it’s a fee for their time and effort in managing the Trust.
Conclusion
So, does the Trustee get the money in the Will? The answer is both yes and no. Yes, the Trustee receives and controls the Trust assets, but strictly in a legal and administrative capacity. No, they do not get to keep the money unless the Will specifically names them as a beneficiary. Understanding the difference between managing funds and being entitled to them is key to avoiding confusion and conflict.
At Kings Court Trust, we specialise in making estate administration clear, efficient, and stress-free. If you’re dealing with a Will that involves a Trust and want to ensure everything is handled properly, our team is here to support you every step of the way.
