QUESTION
Is the beneficiary of a trust allowed to pay loans from the trust?
Asked on Mar 13th, 2014 on Estate Planning - Michigan
More details to this question:
I am the beneficiary of a HEMS trust from my mother. Is payment to Sallie Mae to cover a student loan permissible as education?
8 ANSWERS
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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It's within the trustee's discretion, I think. It's unfortunate to see a beneficiary paying interest on a student loan when there's an education trust that could satisfy the amount.
Answered on Mar 13th, 2014 at 6:27 PM
Commercial Contracts Attorney serving Boise, ID
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Peters Law, PLLC
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Only if the trustee gives you the money to pay it. Only the trustee controls the money.
Answered on Mar 13th, 2014 at 6:13 PM
Edwin K. Niles
Your loan? Mom's? Would have to review trust to answer.
Answered on Mar 13th, 2014 at 6:12 PM
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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It is within the discretion of the trustee to consider a student education loan as a proper purpose for education principal withdrawals. The trust would pay the student loans directly.
Answered on Mar 13th, 2014 at 6:10 PM
2 Awards
It depends upon specifically what the trust says, if that is a discretionary payment, and if the trustee is okay with it.
Answered on Mar 13th, 2014 at 5:47 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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The terms of the trust govern the trustee's action, and if you're a beneficiary also, then the trustee's fiduciary duties toward all beneficiaries take precedence.
Answered on Mar 13th, 2014 at 5:46 PM
Thomas Edward Gates
That depends upon the terms of the Trust. The Trustee makes a determination on whether such expense is permitted. I think Sallie Mae would qualify if one can show that a reasonable effort went to obtaining the degree. If one is unable to show valid progress taken to obtain the degree, then the payment should be denied.
Answered on Mar 13th, 2014 at 5:44 PM
Business Planning Attorney serving Livonia, MI
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Frederick & Frederick Attorneys at Law
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I would need to see the trust to make sure, but this would generally be allowed.
Answered on Mar 13th, 2014 at 3:18 PM