In an Oklahoma Trust the difference between a beneficiary and a trustee is important for deterring rights and duties. Under Oklahoma estate laws, a beneficiary in a Trust is an individual that will enjoy the Trust’s assets. In legal terms, beneficiaries are considered the Trust’s “equitable owners.” The beneficiaries may either receive the assets and cash from the Trust outright (full payment in one time), or in installments spread over a time period, according to the Trust document provisions.
A trustee, on the other hand, is the individual who manages the assets of the Oklahoma Trust. Although beneficiaries are the ultimate recipients of these assets, in some Trusts they may not manage these assets. For instance, as a homeowner, you are both its beneficial owner (you reside there) and its legal owner (you run and manage the property).
But when the home is owned by a Trust, the beneficiaries of a life estate can only enjoy living in it (if the terms of the Trust permit that). But the management decisions related to the sale, refinance, and major repairs of the home will be made by the trustee, who performs the role of a legal owner. In other words, depending on what type of Trust is created the Trustee manages the Trust for the benefit of a beneficiary.
Obligations and Duties of Trustees and Beneficiaries
Beneficiaries of the Trust enjoy the assets under the Trust either immediately or at some point in the future. Until then, they must abide by the terms of the Trust document. The legal duty of the trustees is greater in Oklahoma because they hold a position of control over the Trust’s assets that are meant for the use of the beneficiaries.
If the Tulsa, Oklahoma Trust is for the benefit of another the trustee must act in a way that benefits the Trust, and not himself or herself. At the same time, they are expected to treat the beneficiaries with fairness and equity. The trustees can usually carry out their duties and obligations to manage the assets more effectively when they maintain a cooperative and cordial relationship with the Trust’s beneficiaries.
More than the financial aspects, the people dealing aspects can be more complicated in many of these cases. An experienced trustee will understand these challenges and act appropriately for the larger good of the Trust.
When the Trustee and Beneficiary are the Same Person
In many cases in Oklahoma, the same individual might be both a beneficiary and a trustee. For instance, the surviving spouse is often a beneficiary as well as a successor trustee of a family trust. In a Trust of parents, it is often seen that one adult child is appointed as the trustee, while other children (siblings of the trustee) are co-beneficiaries.
When the same individual is both the co-beneficiary and the trustee, it involves a greater sense of responsibility because as a trustee they must be fair to all other co-beneficiaries, and not do anything to unfairly put themselves at an advantage at the cost of other beneficiaries.
A trustee who is also a beneficiary should take extra care to:
· Never use the assets of the trust for personal benefit
Maintain clear and meticulous records
· Pay a fair compensation to themselves (if it is provisioned) in exchange for the services they provide
Tulsa Wills and Trust Attorneys Near You
If you’re considering a Trust there are several different options available to you. From self settled trusts designed for asset protection on to revocable trust we can help you draft what’s best for you. In addition to avoiding probate a trust gives you the ability to better control how your assets are dealt with both before you pass away and afterwards. Get a free consultation with our Tulsa Probate lawyers Kania Law Office 918.743.2233