Trustee has an absolute and unqualified duty to pay the correct beneficiary.
A trustee is not personally liable for a mistake of fact regarding a distribution which is made before the trustee has: Actual knowledge, or Written notice. Trustee must seek return of improperly distributed property.
1. As settlor directed in the trust.
2. If beneficiary is a competent adult: To beneficiary Unless trust provides otherwise
3. Beneficiaries with reduced capacity – § Who? Minors Person who in judgment of trustee is incapacitated. ▪ Note: Judicial or medical determination not needed.
3. Beneficiaries with reduced capacity -- § Distribution options: Beneficiary Guardian of person or estate Directly for HEMS Custodian (TUTMA) Reimburse person caring for beneficiary Manage as separate fund on B’s behalf subject to B’s right to withdraw
4. May trustee deviate from settlor’s instructions? General rule = no Seek court permission under §