You have a parent or grandparent who passed away and left a considerable amount of money in a trust for you. However, there are conditions for being able to access that money. Maybe there are a lot of them or perhaps you believe the conditions are unreasonable. Is there anything you can do about it?
People often establish what are often referred to as “incentive,” “spendthrift” or “conditional” trusts. These are often used when someone wants to leave money to a family member but doesn’t believe they have the maturity or judgment to handle it wisely.
Some conditions on a trust are legal and appropriate
At the time the trust is established, the beneficiary may be struggling with an addiction. Having access to a great deal of money could literally kill them if it allows them to feed that addiction. A conditional trust, managed by a responsible trustee, lets them have access to some or all of the funds only under certain conditions, like getting – and staying – in a recovery program.
Other conditions can legally be established – like requiring the beneficiary to finish college or remain employed. People have a right to do what they can to help ensure that their assets are being used by family members who are willing to work to better themselves and not just rely on their inheritance.
When is a condition not enforceable?
Some people, however, have a hard time giving up control over their children or other heirs even after they’re gone. If they don’t have solid legal guidance when developing their estate plan, they might include unenforceable, invalid conditions. Key areas in which those who establish trusts can’t place conditions include:
- Marriage or divorce: This includes any conditions on whom a person can or can’t marry, whether they have to marry and whether they can get divorced.
- Religion: A beneficiary can’t be required to follow a particular religion or be forbidden from converting to another religion in order to access their inheritance.
- Illegal activity: A beneficiary can’t be required to do anything illegal. That can include hiding or destroying evidence of criminal activity or participating in a family “business” that’s illegal, for example.
Conditions like these are sometimes referred to as “dead hand control.” If you believe that the conditions of your trust are not enforceable, it’s best to seek legal guidance. You may be able to challenge one or more of the trust conditions and have them ruled invalid.