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Trustee Accounting to Beneficiaries
Our Orange County trust litigation lawyers focus on helping trustees, beneficiary, and heirs in the event there is a trust contest. Our Orange County Law firm focuses primarily on trust and estates disputes based upon undue duress, embezzlement, breach of fiduciary duty, and other estate litigation matters.
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Tips A BENEFICIARY SHOULD KNOW TODAY!
Tips A TRUSTOR SHOULD CONSIDER
Trustee Accounting to Beneficiaries
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Now, if you are a beneficiary, the Trust document will have to be read to determine who is entitled to an accounting. If the Trustee contacts all beneficiaries at the onset, submit your request to receive the Trust document to ensure you stay compliant and reasonable. However, there are timelines to maintain legal rights in various steps of the Trust administration process.
When you receive an accounting, you will receive six separate types of data based on California probate code section 16063
(1) A statement of receipts and disbursements of principal and income that have occurred during the last complete fiscal year of the trust or since the last account.
(2) A statement of the assets and liabilities of the trust as of the end of the last complete fiscal year of the trust, or as of the end of the period covered by the account.
(3) The Trustee’s compensation for the last complete fiscal year of the trust or since the last account.
(4) The agents hired by the Trustee, their relationship to the Trustee, if any, and their compensation, for the last complete fiscal year of the trust or since the last account.
(5) A statement that the recipient of the account may petition the court pursuant to Section 17200 to obtain a court review of the account and of the acts of the Trustee.
(6) A statement that claims against the Trustee for breach of trust may not be made after the expiration of three years from the date the beneficiary receives an account or report disclosing facts giving rise to the claim.
Please note: If the Trust is revocable, i.e., Trustor is still alive and not capacitated, there is no duty for the Trustor to provide any Trust document whatsoever nor any accounting to beneficiaries. A revocable trust is considered a living trust.
When does a trustee have to give the beneficiaries an accounting of trust money
As discussed, the beneficiaries are entitled to receive current accounting. If the Trustee does not provide up-to-date accounting, the Beneficiaries will need to make a written demand to the Trustee and allow a reasonable time to reply. If, after 60 days, you hear no response, you can file a probate court petition to get a court order requiring the Trustee to report.
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If you are a beneficiary or Trustee looking for beneficiaries’ rights to trust information, then read on. Learn about whether the Trustee can do the following:
So, it is essential to know the rights of beneficiaries like the topic, “who has more right a trustee or the beneficiary”, which is subjective.
Let’s start with what rights a beneficiary has.
Beneficiary Rights to See Information
You are entitled as a beneficiary to receive information that the Successor Trustee is managing the Trust properly. You have the right to protect the assets the settlor/grantor has bequeathed to you. A beneficiary should also understand, however, there are timeframes the Trustee should adhere to, to ensure they keep on the right side of the courts. You will want to be up-to-date as to the progress of the Trust Administration process while offering ‘reasonable’ time for the Trustee to distribute the updates that are being asked for.
1st takeaway: As a beneficiary, you have to understand the Trustee has the power to settle the estate, utilizing attorneys, appraisers, and other expert opinions to assist in resolving the estate to ensure no breach of their fiduciary duty. Within the Trustee duties, are ‘timeframes’ to act that typically range between 12-18 months based on whether properties should be sold, debts, tax implications, and so forth.
One other timeframe is the distribution of the Trust document.
Does a Beneficiary have a right to see the Trust information?
Are Beneficiaries entitled to a copy of the Trust?
The answer is it depends! While the person who created the Trust is alive, the living Trust is what is called, “revocable” and the Trustor has no legal requirement to show you the Trust. The Trustor can eliminate the Trust at any time while they are alive.
Is a Trust Public record?
No, a Trust is not a public record and this is why most grantors choose a Trust over a Will.
Now, when the Trustee/Settlor has passed away, the Trust becomes irrevocable straightaway, meaning, it is no longer changeable. If you are a beneficiary of a trust, then it’s at this point you have statutory rights as a beneficiary right. If you are the Trustee, you now have a legal duty to keep the beneficiaries of the Trust informed how the trust assets are being managed.
How do you follow-up on your Beneficiary Rights to Information
First, have knowledge on your side. Should you need counsel, because you feel a lack of transparency from the Trustee, then best to seek a trust litigation attorney. Under California Probate Code Section 16061.7, the Trustee has 60 days after the Settlor/Trustor’s death with a real copy of the Trust documents, including any amendments.
The best practice is to stay in front of the curve by sending an email or letter to the Trustee that you are aware of the 60 days and would appreciate the True Copy of the Trust documents. Hopefully, this suffices, but if you don’t receive the Trust document, then its time to ratchet it up. Let the Trustee(s) know you may seek counsel, and petition with the courts to receive your copy and that any costs, i.e., attorney fees, etc., will be paid by them.
What Should a Beneficiary Expect from the Trustee at the initial stages?
You will hear the word “reasonably” from time-to-time because there is no fast hard rule as to each part of the Trust Administration process.
So, what are some early expectations you can expect to receive?
It’s the following:
- Trustee to get in touch with all the beneficiaries early on.
- Educate all beneficiaries of the role
- Help determine expectations based on the assets within the Trust
- All assets to be counted for and controlled before distribution of the trust assets to any beneficiary.
Transparency is the key to a successful Trust Administration process.
What other rights does a beneficiary have of a Trust?
- Right to Communication – You have the right to be kept informed of any changes of the Trust. Proper communication is vital.
- Right to Accounting – You have the right to an accounting, such as assets the Trust holds, interest earned by the Trust, expenses paid out by the Trust.
- Right to petition a court to remove a Trustee or terminate a trust – The right to petition to remove a Trustee or invalidate a Trust comes with a set of standards that should be brought up in front of a probate court and an experience trust litigator on your side is prudent.
- Right to Distribution – Under the terms of the trust agreement, you have a right to receive your Trust asset distributions as a beneficiary or heir.