Money held in trust clause: Copy, customize, and use instantly
Introduction
A money held in trust clause outlines the handling of funds held by one party (trustee) on behalf of another (beneficiary), specifying the obligations and responsibilities of the trustee. It ensures the proper management, protection, and distribution of funds according to the terms of the agreement.
Below are templates for money held in trust clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Money held in trust clause (general)
This version outlines a general provision for money held in trust.
The Trustee agrees to hold the sum of [amount] in trust for the benefit of the Beneficiary. The Trustee shall be responsible for managing and distributing the trust funds in accordance with the terms and conditions set forth in this Agreement. The Trustee shall act in the best interests of the Beneficiary and shall not use the funds for personal purposes.
Money held in trust clause (with specific instructions for distribution)
This clause outlines specific instructions for the distribution of the funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall distribute the funds as follows: [list of specific distribution instructions, such as periodic payments, lump sum distribution, or upon the occurrence of a specific event]. The Trustee shall provide the Beneficiary with a detailed accounting of all distributions upon request.
Money held in trust clause (with interest on funds)
This version includes interest earned on the trust funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. Any interest earned on the funds during the term of this Agreement shall be added to the principal and shall be distributed to the Beneficiary in accordance with the distribution schedule outlined in this Agreement. The Trustee shall ensure that all interest earned is properly documented and allocated.
Money held in trust clause (with limitations on use of funds)
This clause imposes limitations on how the funds can be used.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall use the funds solely for the purpose of [specify purpose, e.g., education, healthcare, etc.]. The Trustee shall not use or distribute the funds for any other purpose without the prior written consent of the Beneficiary. Any misuse of funds shall be considered a breach of this Agreement.
Money held in trust clause (with conditions for release of funds)
This clause specifies conditions for the release of the funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall release the funds to the Beneficiary upon the occurrence of the following conditions: [list of conditions, such as reaching a certain age, achieving a specific milestone, or upon the Beneficiary's request]. The Trustee shall not release the funds unless all conditions have been met in accordance with this Agreement.
Money held in trust clause (with trustee compensation)
This version includes trustee compensation.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall be entitled to a fee of [percentage or amount] for managing the trust and performing the duties outlined in this Agreement. The fee shall be paid from the trust funds and shall be clearly documented in all trust-related statements provided to the Beneficiary.
Money held in trust clause (with periodic reporting)
This clause requires periodic reporting on the trust funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall provide the Beneficiary with written reports on the status of the trust funds at regular intervals, such as quarterly or annually. These reports will include an accounting of all deposits, withdrawals, and interest earned, as well as a summary of the trust’s current balance.
Money held in trust clause (with right to revoke trust)
This clause grants the right to revoke the trust.
The Trustor agrees to place the sum of [amount] in trust for the Beneficiary. The Trustor reserves the right to revoke this trust at any time prior to the distribution of the funds, by providing written notice to the Trustee. Upon revocation, the Trustee shall return the funds to the Trustor, less any administrative fees or expenses incurred.
Money held in trust clause (with trustee’s fiduciary duty)
This clause outlines the trustee's fiduciary duties.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary and acknowledges the fiduciary duty to act in the best interest of the Beneficiary at all times. The Trustee shall not engage in any transactions that may result in a conflict of interest and must act with the utmost care, loyalty, and diligence in managing and distributing the funds.
Money held in trust clause (with automatic transfer to beneficiary)
This version includes an automatic transfer of funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The funds shall automatically transfer to the Beneficiary on [specific date or upon a particular event, e.g., when the Beneficiary reaches a certain age or milestone]. The Trustee will notify the Beneficiary of the impending transfer at least [X] days prior to the transfer date.
Money held in trust clause (with trustee’s discretion)
This clause allows the trustee discretion over the funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall have the discretion to make distributions of the trust funds as they see fit, based on the best interests of the Beneficiary. The Trustee must exercise this discretion reasonably and in accordance with the purpose of the trust. Any distributions made will be documented and provided to the Beneficiary upon request.
Money held in trust clause (with third-party supervision)
This version includes third-party supervision of the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. A third-party supervisor, [name or position], will be appointed to oversee the administration of the trust and ensure that the Trustee is complying with the terms of this Agreement. The supervisor will have the authority to review the Trustee’s records and ensure that all actions are in the best interest of the Beneficiary.
Money held in trust clause (with dispute resolution mechanism)
This clause includes a dispute resolution mechanism for conflicts related to the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. In the event of any dispute regarding the administration or distribution of the trust funds, the Parties agree to resolve the matter through [mediation/arbitration] before pursuing legal action. Both Parties will work in good faith to reach a resolution in a timely and cost-effective manner.
Money held in trust clause (with notification of any change in trust terms)
This version includes a requirement to notify of any changes to the trust terms.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall notify the Beneficiary in writing of any proposed changes to the terms of the trust, including changes in the distribution schedule, use of funds, or the appointment of new trustees. The Trustee will not implement any changes until the Beneficiary has acknowledged or consented to the modifications in writing.
Money held in trust clause (with trustee’s liability)
This clause outlines the trustee’s liability for mismanagement.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall be held liable for any loss or mismanagement of the funds due to negligence, misconduct, or failure to comply with the terms of this Agreement. In the event of such mismanagement, the Trustee will be required to compensate the Beneficiary for any resulting losses, in addition to any other remedies available under law.
Money held in trust clause (with successor trustee provision)
This clause provides for a successor trustee in case the original trustee is unable to fulfill their duties.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. In the event that the Trustee becomes unable or unwilling to fulfill their duties, a successor Trustee will be appointed by the Beneficiary, who will assume all responsibilities outlined in this Agreement. The successor Trustee will inherit all powers, duties, and obligations related to the administration of the trust.
Money held in trust clause (with revocation of trust upon death of the trustor)
This clause allows for the revocation of the trust upon the trustor’s death.
The Trustor agrees to place the sum of [amount] in trust for the Beneficiary, with the understanding that this trust will be revoked upon the Trustor’s death. Upon the Trustor’s passing, the Trustee shall release the funds to the Trustor’s estate or as otherwise directed by the Trustor’s will, subject to applicable law.
Money held in trust clause (with specific uses for trust funds)
This clause specifies the uses for which the trust funds can be used.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The funds are designated for the following purposes: [list of specific uses, e.g., education, healthcare, housing, etc.]. The Trustee will only distribute the funds for these specified purposes and must obtain written consent from the Beneficiary if any funds are to be used for an alternative purpose.
Money held in trust clause (with time-bound distribution)
This version specifies a time-bound distribution of funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The funds shall be distributed as follows: [specified distribution timeline, e.g., quarterly payments, lump sum on a specific date]. If the Trustee fails to make the distributions on the agreed dates, the Trustee will be required to compensate the Beneficiary for any losses incurred due to the delay.
Money held in trust clause (with early withdrawal option for beneficiary)
This clause allows the Beneficiary an early withdrawal option.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Beneficiary may request an early withdrawal of the funds, in whole or in part, under the following conditions: [specify conditions, such as financial hardship, emergency need, or specific date]. The Trustee shall approve the early withdrawal request if it meets the agreed criteria.
Money held in trust clause (with tax reporting responsibility for trustee)
This clause assigns tax reporting responsibilities to the trustee.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall be responsible for reporting any income or interest earned on the trust funds to the appropriate tax authorities. The Trustee will also provide the Beneficiary with the necessary documentation for tax purposes at the end of each fiscal year.
Money held in trust clause (with automatic transfer to beneficiary upon event)
This clause provides for an automatic transfer of funds upon a specific event.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. Upon the occurrence of [specific event, e.g., the Beneficiary reaching a certain age, marriage, or completion of an educational program], the Trustee shall automatically transfer the trust funds to the Beneficiary without further notice or consent. The transfer will be in accordance with the terms outlined in this Agreement.
Money held in trust clause (with provision for additional contributions)
This clause allows for additional contributions to the trust.
The Trustor agrees to place the sum of [amount] in trust for the Beneficiary and may, at their discretion, make additional contributions to the trust. Any additional contributions will be subject to the same terms and conditions as the initial funds, and the Trustee shall manage and distribute the added funds in accordance with this Agreement.
Money held in trust clause (with trustee's right to withhold distribution)
This clause gives the trustee the right to withhold distribution under certain conditions.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee may withhold distribution of the funds if the Trustee determines that it is in the best interest of the Beneficiary, including but not limited to situations where the Beneficiary is unable to manage the funds responsibly or if there are unresolved legal or financial issues related to the Beneficiary’s eligibility.
Money held in trust clause (with beneficiary's right to inspect trust)
This clause grants the Beneficiary the right to inspect the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Beneficiary has the right to inspect the records related to the trust, including financial statements, reports, and any documents concerning the management or distribution of the trust funds, upon request. The Trustee shall provide access to these records in a timely manner.
Money held in trust clause (with trustee liability for mismanagement)
This clause outlines the trustee’s liability for any mismanagement of the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary and assumes full responsibility for managing the trust in accordance with this Agreement. The Trustee shall be liable for any loss or damage resulting from the mismanagement of the trust, including failure to make appropriate investments or improper disbursement of funds.
Money held in trust clause (with defined terms for release of funds)
This clause defines specific terms for the release of funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall release the funds upon the occurrence of the following conditions: [list of conditions, e.g., upon the completion of a specific project, the death of the Trustor, or when the Beneficiary reaches a certain age]. The Trustee shall ensure that the release is in full compliance with these terms.
Money held in trust clause (with no access to principal for specified period)
This clause restricts access to the principal for a specific period.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The principal shall not be accessible to the Beneficiary until [specific time period, such as five years from the date of the Agreement] or until the occurrence of [specified event, such as the death of the Trustor]. However, the Beneficiary may access any interest or earnings on the principal during this period, subject to the terms of the Agreement.
Money held in trust clause (with requirement for third-party approval for disbursements)
This version requires third-party approval for disbursements.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. Any disbursement of the funds must be approved by a third-party entity, [e.g., an accountant, attorney, or financial advisor], before the funds can be released. The Trustee shall submit a request for disbursement to the third party, who will review and approve the release based on the terms of the Agreement.
Money held in trust clause (with co-trustee for oversight)
This clause includes a co-trustee for oversight.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary, with [Co-Trustee Name] appointed as a co-trustee. The co-trustee will provide oversight to ensure that the Trustee’s actions are in compliance with the terms of this Agreement. Both Trustees must agree on the management and distribution of the trust funds, and any decision made by one Trustee must be reviewed and approved by the co-trustee.
Money held in trust clause (with trustee’s right to consult with advisors)
This version allows the trustee to consult with advisors.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee has the right to consult with legal, financial, or tax advisors to ensure the proper management of the trust. The Trustee will act in good faith and in the best interest of the Beneficiary, taking advice as necessary to comply with the terms of this Agreement.
Money held in trust clause (with a provision for extraordinary expenses)
This clause allows for extraordinary expenses to be paid from the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. In addition to the scheduled distributions, the Trustee may use the funds to cover extraordinary expenses that arise in the Beneficiary’s best interest, such as medical emergencies, legal fees, or unforeseen financial needs. Any such expenses must be documented, and the Trustee shall provide the Beneficiary with an accounting of the expenditures.
Money held in trust clause (with a designated account for trust funds)
This version requires a designated account for trust funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The funds will be placed in a designated trust account at [bank or financial institution], which will be separate from the Trustee’s personal accounts. The Trustee will ensure that the trust funds are properly accounted for and will not be commingled with any other assets.
Money held in trust clause (with trustee’s duty to notify of changes in trust status)
This clause requires the trustee to notify of changes in trust status.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall notify the Beneficiary promptly if there are any significant changes to the status of the trust, including changes in account balances, distributions, or the Trustee’s ability to manage the trust. All such notifications will be made in writing.
Money held in trust clause (with potential modification of terms by agreement)
This version allows for modification of terms by agreement.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary, subject to the terms of this Agreement. The terms of the trust may be modified at any time by mutual written agreement between the Trustee and the Beneficiary. Any changes to the terms, including distribution schedules or conditions for release, will be documented and agreed upon by both Parties.
Money held in trust clause (with right of beneficiary to withdraw income)
This clause allows the beneficiary to withdraw income earned on the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Beneficiary is entitled to withdraw any income or interest earned from the trust funds, but the principal shall remain intact unless otherwise specified. The Trustee will provide periodic statements showing income and earnings, and the Beneficiary may request withdrawals at their discretion.
Money held in trust clause (with distribution of funds upon trustor’s death)
This clause specifies distribution upon the Trustor’s death.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary during the lifetime of the Trustor. Upon the death of the Trustor, the Trustee shall distribute the remaining funds to the Beneficiary according to the terms of this Agreement or the Trustor’s will. The Trustee shall ensure that the trust funds are distributed as soon as legally permissible after the Trustor’s death.
Money held in trust clause (with provision for tax payments)
This clause provides for the use of trust funds for tax obligations.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall use a portion of the trust funds to cover any tax liabilities incurred by the trust, including income tax, estate tax, or any other tax obligations. The Trustee will provide a detailed account of any tax payments made from the trust to the Beneficiary.
Money held in trust clause (with periodic review of trust balance)
This version requires periodic reviews of the trust balance.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall review the trust balance at regular intervals, such as annually, and provide a report to the Beneficiary detailing the current balance, any distributions made, and any accrued interest or income. The Trustee will make adjustments to the trust if necessary to meet the goals of the Beneficiary.
Money held in trust clause (with right to appoint a successor trustee)
This clause allows the appointment of a successor trustee.
The Trustor agrees to place the sum of [amount] in trust for the Beneficiary. In the event the Trustee is unable or unwilling to perform their duties, the Beneficiary has the right to appoint a successor Trustee. The successor Trustee will assume all responsibilities and obligations outlined in this Agreement and will manage the trust in the best interests of the Beneficiary.
Money held in trust clause (with provision for partial withdrawals)
This clause allows partial withdrawals from the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Beneficiary has the right to request partial withdrawals of the trust funds as needed, subject to the Trustee's approval. The Trustee will ensure that any partial withdrawals do not reduce the trust principal below the minimum required balance, as specified in this Agreement.
Money held in trust clause (with trustee obligation to invest funds)
This version requires the Trustee to invest the funds.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary and has the obligation to invest the funds in a manner that is consistent with the risk tolerance and goals of the trust. The Trustee will ensure that the investments made are appropriate for the trust’s objectives and will regularly review and adjust the investment portfolio.
Money held in trust clause (with provisions for trust termination)
This clause outlines the termination of the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The trust shall terminate upon the occurrence of [specific event, such as the Beneficiary reaching a certain age, the Trustor’s death, or fulfillment of the purpose of the trust]. Upon termination, the Trustee will distribute the remaining funds to the Beneficiary or as otherwise directed in this Agreement.
Money held in trust clause (with allowance for extraordinary expenditures)
This version allows for extraordinary expenditures from the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee may, at their discretion, authorize expenditures from the trust for extraordinary needs, such as medical emergencies or unforeseen legal costs. Any such expenditures must be documented, and the Trustee will inform the Beneficiary of these expenditures within [X] days of the withdrawal.
Money held in trust clause (with distribution upon specified event)
This clause provides for distribution upon a specified event.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall distribute the funds to the Beneficiary upon the occurrence of [specific event, e.g., reaching a certain age, marriage, or completion of an educational goal]. The Trustee shall notify the Beneficiary of the upcoming distribution at least [X] days in advance.
Money held in trust clause (with specific instructions for charitable donations)
This version allows for charitable donations from the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall, upon the Beneficiary’s instruction, make charitable donations from the trust funds to organizations that the Beneficiary designates. These donations will be made in accordance with the applicable laws and within the limits established by the Beneficiary’s wishes.
Money held in trust clause (with annual trust audits)
This clause requires annual audits of the trust.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall conduct an annual audit of the trust, which will include a full accounting of the trust’s assets, income, and distributions. The results of the audit will be shared with the Beneficiary, and the Trustee will take any necessary actions to ensure the trust’s continued compliance with this Agreement.
Money held in trust clause (with right to challenge trustee’s actions)
This clause grants the Beneficiary the right to challenge the trustee’s actions.
The Beneficiary has the right to challenge any action or decision made by the Trustee concerning the management or distribution of the trust funds. If the Beneficiary believes the Trustee has violated the terms of the trust, they may request an independent review or seek legal action to resolve the dispute.
Money held in trust clause (with specific provisions for handling disputes)
This version provides a dispute resolution mechanism.
The Parties agree to resolve any disputes regarding the trust’s administration or distributions through [mediation/arbitration]. If a dispute arises concerning the actions of the Trustee, the Beneficiary may request mediation to resolve the issue. If mediation fails, the matter may proceed to arbitration, with both Parties agreeing to accept the arbitrator's decision as final.
Money held in trust clause (with trustee obligation to follow the trustor’s wishes)
This clause binds the Trustee to follow the Trustor’s instructions.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary in accordance with the wishes of the Trustor, as outlined in this Agreement. The Trustee shall follow the instructions provided by the Trustor regarding the use, management, and distribution of the trust funds and shall not act contrary to the Trustor’s instructions unless legally required to do so.
Money held in trust clause (with trustee’s power to delegate responsibilities)
This version allows the Trustee to delegate certain responsibilities.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee may delegate certain responsibilities, including the management of investments or administrative tasks, to third-party professionals or organizations. However, the Trustee remains ultimately responsible for the proper management and distribution of the trust funds.
Money held in trust clause (with provision for the appointment of a trust protector)
This clause allows the appointment of a trust protector.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. A Trust Protector, [name or role], will be appointed to oversee the actions of the Trustee and ensure that the trust is managed according to the terms of this Agreement. The Trust Protector may intervene if the Trustee fails to act in the best interest of the Beneficiary.
Money held in trust clause (with automatic suspension of payments for certain conditions)
This version allows for the automatic suspension of payments under certain conditions.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. If any condition arises that significantly affects the Beneficiary’s eligibility for payments, such as the Beneficiary being incarcerated, facing bankruptcy, or otherwise losing eligibility for distributions, the Trustee will automatically suspend any further payments until the condition is resolved.
Money held in trust clause (with annual review of terms)
This clause requires an annual review of the trust terms.
The Parties agree to review the terms of the trust annually to ensure that they remain in line with the Trustor’s intentions and the current financial situation. The Trustee will schedule an annual review and present any necessary amendments to the terms to the Beneficiary for approval. If any amendments are made, they will be documented and executed in writing.
Money held in trust clause (with distribution on a sliding scale based on beneficiary’s needs)
This version allows for distribution based on the Beneficiary’s needs.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee shall distribute the funds on a sliding scale based on the Beneficiary’s financial needs. Distributions will be determined annually, considering the Beneficiary’s income, living expenses, and other relevant factors. The Trustee shall review and adjust the distribution amounts as necessary to meet the Beneficiary’s changing needs.
Money held in trust clause (with the possibility for a discretionary distribution)
This clause allows for discretionary distributions by the Trustee.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee may, at their discretion, make additional distributions from the trust for any purpose that they deem in the best interest of the Beneficiary. These distributions will be based on the Trustee’s assessment of the Beneficiary’s needs and circumstances and will be provided with documentation and transparency.
Money held in trust clause (with provisions for trustee resignation)
This version allows for the resignation of the Trustee.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Trustee may resign from their duties by providing [X] days’ written notice to the Beneficiary and appointing a successor Trustee. The resignation will not affect the administration of the trust until the new Trustee assumes responsibility.
Money held in trust clause (with beneficiary’s responsibility for trust-related expenses)
This clause makes the Beneficiary responsible for trust-related expenses.
The Trustee agrees to hold the sum of [amount] in trust for the Beneficiary. The Beneficiary shall be responsible for any expenses related to the administration of the trust, including legal, accounting, and tax advisory fees. These expenses will be deducted from the trust funds unless otherwise agreed upon in writing.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.