Grantor Trusts like a Revocable Living Trust or a Medicaid Asset Protection Trust have two different times for distributions: during the Grantor’s lifetime, and after the Grantor’s death. During the lifetime of the Grantor, there are typically options for the trustee to give cash or assets to the named beneficiaries, or to purchase things for the beneficiary. These distributions are often carried out by writing a check or paying a bill electronically from the Trust account. This process is pretty similar to how many of us manage our personal finances.
Once the Grantor dies, many Trusts call for lump sum distributions to residuary beneficiaries. If there are cash accounts, the trustee can write a check to the beneficiaries. When there is real estate to be sold, the trustee can sell the property, sign at the closing, as Trustee, and deposit the proceeds into a Trust account. Then they can distribute the cash as above. Similarly, real estate that is being distributed directly to the beneficiaries requires that the trustee sign a deed transferring ownership to the named beneficiary.
When a trust owns stocks, bonds, or other investments, then the trustee has two options. One option is to liquidate or sell all the investments and then deal with the cash as previously covered. The second option is to transfer the investments in-kind to the named beneficiaries. Typically this is completed with a transfer form or a letter of instruction from the trustee to the custodian company regarding whose account should receive what share of the investments.