What Is a Beneficiary of Trust?

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  • Written By: Jessica Ellis
  • Edited By: Bronwyn Harris
  • Last Modified Date: 17 November 2018
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    Conjecture Corporation
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A beneficiary of trust is the entity to which a trust is granted. Trusts can have multiple beneficiaries, and may grant full access or restricted access to the beneficiaries. Beneficiaries can be people, such as relatives or friends of the grantor, or organizations, such as non-profit or charitable groups that the grantor appreciates. Creating a trust may be an important part of long-term estate planning, as it creates a structure for the estate following the grantor's death.

Depending on the structure of the trust, a beneficiary of trust may have varying degrees of authority over the inherited estate or funds. In a simple trust, the beneficiary of trust immediately assumes all authority over property and access to funds, and can dispose or use these assets as he or she sees fit. In some cases, such as when the beneficiary of trust is a child, a simple trust may not be the best idea, since the beneficiary may be neither legally allowed nor mentally prepared to manage an estate or large inheritance. In this case, the trust created may specify trustees to manage the fund in the interest of the beneficiary; this is sometimes known as an express trust.


In some cases, a trust may create a sequence of beneficiaries. For instance, if a grantor owns a house in which his or her mother lives, the trust may grant the use of the house to the mother for the term of her life. After the mother's death, the primary beneficiary of trust may change, and the property may pass to the ownership of another relative or other beneficiary. With this type of specification, the mother would not have the right to sell the property or leave it to someone in her own trust or will, because she is only granted permanent tenancy, not ownership. Usually the final beneficiary of trust is given the ultimate authority over how to dispose of the estate.

The beneficiary of a trust may do well to seek legal and financial advice once an irrevocable trust is in place. Depending on regional and national tax laws, beneficiaries may be subject to certain taxes on their inherited estate that can easily cause confusion. Inheriting a large trust can cause some financial uproar in a beneficiary's financial life; some legal experts recommend seeking personal financial advice and making concrete plans for investing and management before the trusts is even distributed. Seeking legal advice about a trust can help a beneficiary understand exactly the rights and responsibilities entailed by the trust.

In express trusts, where the beneficiary is under the authority of a trustee, it is important to pay attention to how the estate is being managed. In general, trustees are legally required to act in the best interest of the beneficiary, and cannot profit from the trust in any way. If a trustee misuses funds or assets, or refuses to disclose information about the management of the trust, the beneficiary may be able to sue for the removal of the trustee, as well as for damages.



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Post 1

Is it true that there was a trust created by my birth certificate under the cestui que vie act of 1666, and a corporation created which is traded on the stock market?

And what are my rights, as beneficiary, of the said trust?

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