Yanml have I received a trust distribution?
October 27, 2022 3:47 AM Subscribe
I didn’t wish to receive a trust distribution and was expecting the trust document to arrive plus a normal check that I didn’t intend to cash until some questions were cleared up, it ended up being a cashiers check. When I signed that I received the letter does that mean I have officially now received a distribution?
Mod note: From the OP:
Well I was waiting for the documents to come before I met with a lawyer, but I had read through the state’s UTC booklet and it looks like if I accept a distribution from the trust then I accept that state’s jurisdiction and the matter/property I am concerned about is in a neighboring state so I was keen not to accept a distribution. Now I’m afraid by signing for the letter and accepting the physical check that I have accepted a distribution.posted by taz (staff) at 5:12 AM on October 27, 2022
Not a lawyer.
I don't believe you could reasonably have been deemed to have accepted any payment sent to you in the form of a cheque until you deposit that cheque. Cheques are not payments, they're promises to make payments on presentation.
The difference between a cashier's cheque and a cheque issued directly by the trust is that the trust has already paid the cheque amount into the cheque issuer's bank account. So the trust has made a payment, but only to its own bank, not to you. Banks keep records of these things, and if you were just to burn that cheque (which I'm absolutely not advising you to do!) then the bank would eventually deal with it as an unpresented cheque, and presumably return the money to its customer (the trust).
With a cheque issued directly by the trust, the end result of burning it would be much the same, except that the money would never have left the trust's account for a few months' holiday at the bank's so the only processing needed to handle non-presentation would be to flag that cheque's serial number as stale. But in neither case does any money go anywhere near any of your accounts until you deposit the cheque.
All that signing for the letter can prove is that reasonable efforts have been made to get the physical cheque into your physical hands. But until that cheque gets presented, you've had no actual money so I can't see how you could possibly be deemed to have accepted the payment that the cheque is just a promise to make.
posted by flabdablet at 5:48 AM on October 27, 2022 [2 favorites]
I don't believe you could reasonably have been deemed to have accepted any payment sent to you in the form of a cheque until you deposit that cheque. Cheques are not payments, they're promises to make payments on presentation.
The difference between a cashier's cheque and a cheque issued directly by the trust is that the trust has already paid the cheque amount into the cheque issuer's bank account. So the trust has made a payment, but only to its own bank, not to you. Banks keep records of these things, and if you were just to burn that cheque (which I'm absolutely not advising you to do!) then the bank would eventually deal with it as an unpresented cheque, and presumably return the money to its customer (the trust).
With a cheque issued directly by the trust, the end result of burning it would be much the same, except that the money would never have left the trust's account for a few months' holiday at the bank's so the only processing needed to handle non-presentation would be to flag that cheque's serial number as stale. But in neither case does any money go anywhere near any of your accounts until you deposit the cheque.
All that signing for the letter can prove is that reasonable efforts have been made to get the physical cheque into your physical hands. But until that cheque gets presented, you've had no actual money so I can't see how you could possibly be deemed to have accepted the payment that the cheque is just a promise to make.
posted by flabdablet at 5:48 AM on October 27, 2022 [2 favorites]
Not your lawyer. If you're concerned about jurisdiction, you really need to speak to yours. The subject is tricky and trying to puzzle it out as a layperson is unlikely to get you the results you want in a way you'd like. That said, someone handing you a physical check is unlikely to count as taking an actual distribution, for the reasons flabdablet gives.
posted by praemunire at 7:44 AM on October 27, 2022 [2 favorites]
posted by praemunire at 7:44 AM on October 27, 2022 [2 favorites]
Cashier’s check plus signed delivery is (or often is) good enough to close the books on the trust disbursement, when an uncashed regular check would not be. I would be trying to accelerate the legal meeting, and also contacting a lawyer in the state you want to have jurisdiction over the trust and working it from both ends.
posted by michaelh at 10:54 AM on October 27, 2022 [2 favorites]
posted by michaelh at 10:54 AM on October 27, 2022 [2 favorites]
Mod note: From the OP:
Thank you everyone! I contacted the lawyer I had personally recommended to me with this quick question and they said it wasn’t a distribution unless I cash it and also not to sign a receipt and release form at this point. Now I will send the rest of the documents over and see what happens. Thank you for helping me and encouraging me to just call and get the ball rolling even though it was Friday!posted by loup (staff) at 12:34 PM on October 27, 2022 [3 favorites]
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FWIW I don't think you're in a significantly different situation than if you had received a regular check - the IRS, e.g., doesn't care exactly when the money gets into your account. If I don't cash my current paycheck until January, I will still owe 2022 taxes on it.
posted by mskyle at 4:53 AM on October 27, 2022 [1 favorite]