I come across this question a lot: I am a beneficiary of a will or trust and I am either the personal representative of the estate or the trustee of the trust. Can I use money in the trust for my own personal purposes? After all, I am entitled to the money I am taking out. Won’t it just be an “advance” on my inheritance? This type of thinking has gotten many people in trouble with creditors and the courts, for that matter.
Taking money from a trust or estate is a big mistake if you are a trustee of that trust or personal representative of that probate estate. You are seen as a fiduciary of the estate, and you have certain duties to creditors and other beneficiaries to preserve the estate’s property. Paying for personal expenses because you are also a beneficiary could lead to creditors suing you for failing to pay estate debts. Or worse, other beneficiaries could end up bringing a legal suit against you to remove you from your fiduciary post, and then they might sue you to recover what you took plus attorney’s fees.
Your safest bet is to consult with counsel before administering your trust or probate matter to determine who needs to get paid first. You should do this before distributing estate property, as creditor and distribution rules are very complex matters. Don’t end up getting into legal hot water by incorrectly administering an estate or trust for which you are responsible.
