Can You Spend Money from an Irrevocable Trust?

Spending from an irrevocable trust is according to the terms of the agreement. An irrevocable trust protects and manages assets for beneficiaries. Once an irrevocable trust is created, the grantor no longer has any control over the properties transferred into the trust. Only the trustee, responsible for managing the trust, can distribute funds according to the terms set out in the agreement.

 

Money may be distributed to the beneficiaries of the irrevocable trust; however, this too occurs only under the terms set out in that document. Those can vary rather widely, depending upon what the grantor has determined. For instance, money could be distributed in periodic payments to beneficiaries, or for specific purposes the beneficiaries may have, such as for their education, healthcare, or living expenses. A fiduciary relationship exists on the part of the trustee to follow the terms of the trust and distribute the money accordingly and in conformance with the desires of the grantor.

 

It should be added that, in an irrevocable trust, neither the grantor nor the beneficiaries can freely access the funds. The trustee plays a caretaker role, allowing the assets held in trust to be disbursed in a proper and trust-instruction-compliant manner.

 

In conclusion, while money can be distributed from an irrevocable trust, the spending is subject to the conditions outlined in the trust agreement and is managed by the trustee. In One Pacific Trust, we  provide expert services in creating and managing irrevocable trusts, ensuring that assets are handled according to the grantor's wishes while offering peace of mind for beneficiaries.