A specific distribution in a trust refers to the payment of a specific amount of money or property from the trust to a beneficiary. This is different from an ongoing distribution, which is a regular payment made to a beneficiary over time.
In a trust, the specific distribution can be triggered by a specific event, such as the beneficiary reaching a certain age or the occurrence of a particular event, as specified in the trust agreement. The specific distribution can be a one-time payment or a series of payments spread over a certain period of time. The specific distribution is governed by the terms of the trust agreement and is subject to the terms and conditions set forth in the agreement.
A residual beneficiary is a person who is designated to receive the remaining assets of an estate, trust, or life insurance policy after all other named beneficiaries have received their share. In other words, a residual beneficiary is someone who receives the balance of the estate or trust fund after all other specified gifts or bequests have been distributed.
For example, if someone has named multiple beneficiaries in their will or life insurance policy, each recipient would receive their specified portion, and any remaining assets would be given to the residual beneficiary. This individual is often referred to as a "catch-all" beneficiary because they are only entitled to receive the residual or leftover assets after all other distributions have been made.
A remote contingent beneficiary is a type of beneficiary who is only eligible to receive assets or benefits in the event that certain conditions or circumstances are met. In other words, a remote contingent beneficiary is a secondary beneficiary who only becomes entitled to receive assets if the primary beneficiaries are unable to do so.
For example, if someone has named their spouse as the primary beneficiary of their life insurance policy, but also names their children as remote contingent beneficiaries, the children would only receive the life insurance benefits if the spouse predeceased the policyholder or was otherwise unable to receive the benefits.
The designation of remote contingent beneficiaries is often used in estate planning to ensure that assets are distributed to the intended recipients even if the primary beneficiaries are unable to receive them. This type of beneficiary designation can help to protect the assets and ensure that they are distributed according to the policyholder's wishes.
Types of Trust Distributions
The distribution of a trust can be made through several methods, which are commonly used by the trustee to distribute the trust assets to the beneficiaries.
Some of the common methods of distribution include:
The specific method of distribution for a trust will depend on the terms of the trust document and the goals and objectives of the grantor who created the trust.