If a bank account is held as "A and B as trustees for A's revocable living trust" when do beneficiaries of A's trust have ownership rights to account balances? When A dies or when both A and B die?
What if account was held with A as sole trustee ("A ATF A's RLT") before B was added as holder?
Note: A's RLT is not a joint marital trust. It becomes irrevocable on A's death. B is not co-trustee with A, but is successor trustee and becomes trustee upon A's death or disability. Right to remove property from trust is reserved by A as trust maker. Residuary clause of trust only applies to "tangible personal property." There is pour-over will with copy attached to trust declaration, but original will is lost.
Note: This is in Illinois. Please refer to 205 ILCS 625/3. We need help figuring out this part: "(a) If two or more persons are designated trustees of the account, as between them they shall hold the account and all balances therein which exist from time to time as joint tenants with right of survivorship and not as tenants in common" This seems inconsistent with the idea that trustees hold property for the benefit of the beneficiaries.
Estate Planning Attorney
I agree with the previous reply. The beneficiaries' rights to the trust property will be determined by the terms of the trust agreement.
A and B are trustees whose job it is to administer the trust for the benefit of the beneficiaries. As trustees, they have a fiduciary duty to act in the best interests of the trust beneficiaries. Any rights that the beneficiaries have regarding distributions from the trust exist regardless of who the trustees are and when they became trustees.
But the trust terms will spell out how and when distributions can be made to the beneficiaries, including how and when the trust should terminate and any remaining principle distributed outright to the beneficiaries.
For example, if both A and B trustees were to die in a common accident, the trust terms should identify who is next in line as successor trustee. If the trust terms are silent, then that determination would have to be made by a judge. But the death of both A and B would not mean that the trust would terminate and any assets distributed to the beneficiaries -- unless the terms of the trust provide for such an outcome.
Hope this helps.
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