Legal Definitions - right of retainer

Definition: The right of retainer is a power given to a trustee to hold back trust funds or property from being distributed to the beneficiary when the beneficiary owes money to the trust.

Example: Let's say that John is the trustee of a trust fundset up for his sister, Jane. Jane owes the trust $10,000 in unpaid taxes. John can use his right of retainer to hold back $10,000 from Jane's distribution until she pays back the money she owes to the trust.

Explanation: This example illustrates how the right of retainer works in practice. The trustee has the power to withhold funds or property from the beneficiary until they fulfill their obligations to the trust. In this case, Jane owes money to the trust, so John can use his right of retainer to hold back the amount owed until Jane pays it back.