A remaining beneficiary is entitled to receive support from a trust after previous beneficiaries have been paid. The grantor can set instructions for the remaining beneficiary, who can claim any remaining assets. This arrangement ensures assets are used as intended and can involve multiple generations.
A remaining beneficiary is a person or entity that is entitled to receive support from a trust after the interests of all previous beneficiaries have been exhausted. At this point, this remaining beneficiary has the right to claim any assets still remaining in the trust, subject to instructions set forth by the trust grantor. This type of arrangement is often very effective in ensuring that all assets of the estate are ultimately used in the manner intended by the original owner, and can sometimes involve multiple generations of beneficiaries.
Typically, a remaining beneficiary is a means to ensure that once the trust assets are no longer needed by the primary beneficiaries, the grantor can still designate what ultimately happens to those assets. For example, the grantor may reserve a residence for a child, with the stipulation that the child is free to live in the property for its entire life. The trust agreement may require the trust to bear all upkeep and upkeep costs, as well as paying property taxes. When the child dies or voluntarily chooses to give up the property for any reason, the provisions of the trust may require the inheritance of the property to a charity that is named as the remaining beneficiary.
The use of a remaining beneficiary agreement can be applied to almost any type of asset held by the trust. In addition to property, the deal may involve stocks, bonds, and any other financial holdings that are included in the deal. This makes it possible to ensure that cash disbursements from the trust made based on investment returns can go first to a child of the grantor, then to a grandchild once the child has passed away. A remaining beneficiary agreement can even be used to ensure that the grantor’s spouse can stay in the family home for the rest of their life, with provisions to prevent the sale of the property and the disbursement of proceeds until after the spouse has died.
Typically, the concept of the remaining beneficiary is to ensure that the people the grantor wishes to provide some type of ongoing support are properly cared for and that the trust’s holdings are ultimately disposed of in a way that is consistent with the wishes. of the grantor. Agreements of this type are subject to the laws and regulations that apply in the jurisdiction where the trust is established, making it necessary to structure the trust in accordance with those laws. Financial and legal professionals can help organize the trust to include this type of provision, making it possible to ensure that any remaining beneficiaries involved are provided in a timely manner.
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