It’s been my experience that estate Beneficiaries can be a little too passive. When a loved one passes, likely a family member or close friend has been named the Personal Representative of the Estate, and/or Trustee of the Family Trust. That person is likely grieving as well. Maybe they have no idea what they are doing and are either too proud or too busy to ask for help. Time passes. Beneficiaries don’t know what is going on. Maybe the Beneficiaries begin to suspect it’s not being handled very well. Tensions mount. Before you know it, things have ballooned into a real emotional storm that leads to hurt feelings and years of awkwardness at the family holiday dinner. Not good.
If you are a Beneficiary or Heir, being informed about the Trust or Probate Administration process can actually be helpful. How can you get informed, you ask? Well, you are doing that right now. Good job. Also check out the extensive Frequently Asked Questions section of my website and other blog articles under the Probate Administration or Trust Administration sections. If that is not enough for you, please contact me for a free consultation.
Trust Beneficiary Rights You Should Know About
To get you started, here are a few common rights of Trust Beneficiaries you should know about:
1) The right to receive a complete copy of the Trust. This can be helpful as it reduces the confusion as to how you think the Trust should be administered, versus how the Trust is intended to be administered. Don’t be shy about making a written request for a copy.
2) The right to be reasonably informed about the Trustee’s actions. If you are working from an informed position, you might actually be helping your Trustee by prodding him or her towards completion or catching innocent mistakes before they become big mistakes. Communication is not necessarily a bad thing in Trust Administration if done with tact.
Included in this right, is the right to an accounting, and to object to that accounting if it is not done properly. Both at the final distribution of the Trust assets, and at periodic intervals before distribution, the Trustee is required to provide the Beneficiaries with a report on the status of the Trust assets, liabilities, and other information relevant to the Trust Administration. Knowing when these reports are due, and what information is required can help keep your Trustee on track towards completion.
3) The right to contest the Trust, or the Trustee’s actions. Remember, it’s not necessarily the Trustee’s job to challenge the Trust provisions. The Trustee owes fiduciary duties to all the Beneficiaries, so if you are aware of something you know is not right, don’t sit back and lose your chance to raise this issue.
Also, when the Trustee is also a Trust Beneficiary, conflicts of interest, self-dealing, and other issues can become problems if left unchecked. As a Beneficiary, you have the right to receive fair and impartial treatment. If you are not getting this, you have the right to ask the Court to remove or replace the Trustee. If a Trustee has acted improperly, leading to a financial loss, you have the right to seek legal remedies against the Trustee.
4) The right to timely distributions. Once of the more common complaints of Beneficiaries is the time it takes for a Trustee to make distributions. In some cases, the Trustee can make a partial distribution before a final distribution of all Trust assets, but does not. If months have passed, and it does not appear that the Trust is closing on a final distribution, you may be entitled to a partial distribution until all affairs can be wound up and a final accounting completed.
Takeaway
It can be tough to strike a balance when enforcing your rights as a Trust Beneficiary. The first step is becoming informed of those rights. Don’t let a communication breakdown take you down the wrong road. Your involvement as a Beneficiary need in the Trust Administration process need not be passive and can actually be a benefit if done from an informed position. Whether Legacy or Business Planning, Contact CASHMAN LAW today for a free consultation to get the Plan You Deserve.™
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