Know Your Rights as a Trust Beneficiary

By Tyler P Krueger, Associate Attorney

Is Your Trustee Administering the Irrevocable Trust Lawfully and in Your Best Interest?

When a trust grantor passes away, their revocable inter vivos trust becomes an irrevocable trust. When the trust becomes irrevocable, the designated trustee becomes responsible for administering the trust. 

​A trustee that accepts this responsibility has an obligation to administer the trust for the sole benefit of the named beneficiaries in the irrevocable trust document[1]. Unfortunately, some trustees disregard this responsibility and take advantage of their power and resources to benefit themselves. What safeguards can a beneficiary use to protect themselves and their inheritance?

Many beneficiaries do not realize that they have rights as part of the trust administration process. These rights protect a beneficiary from deceitful and fraudulent trustees that only want to benefit themselves. 

Beneficiaries do have legally granted rights to make sure that the trustee is acting lawfully. This article explores four rights that a beneficiary can use to ensure that their trustee is administering the beneficiary’s trust lawfully and in the beneficiary’s best interest. 

Right #1 - Did You Receive Trust Notification?

After the death of the trust grantor, each named beneficiary in the trust is entitled to receive notice that the trust has become irrevocable.[2] A beneficiary may not realize they are named as a beneficiary in someone’s trust. The notice is a way to inform a person that they were designated by the grantor to inherit his or her property.

The notice must also give the beneficiary the name and contact information of the trustee administering the trust. It is important that a beneficiary has the trustee’s contact information for numerous reasons. 

A beneficiary must know who is in charge of maintaining and administering the trust assets. Another reason is that the trustee and a beneficiary should discuss all the issues that will impact the trust or the beneficiary. Additionally, a beneficiary needs this information so that they can also exercise their other rights and they can only do that if they have the trustee’s contact information.

Right #2 - Did You Receive a Copy of the Irrevocable Trust?

After the death of the trust grantor, each beneficiary has the right to request a copy of the trust document.[3] This also includes any amendments to the trust. A beneficiary should always request a copy of the trust document to ensure that they are not being deprived of property that is rightfully theirs.

A beneficiary should be concerned of a trustee that avoids providing a copy of the trust, or tells a beneficiary what they will inherit without providing a copy of the trust. These are clues that a trustee might be hiding something or acting contrary to the trust terms.

Right #3 - Did You Receive Any Trust Accounting Reports?

After the death of the trust grantor, each beneficiary has the right to demand the trustee to produce an accounting as part of the trust administration.[4] This is a beneficiary’s greatest tool.

Generally, an accounting report gives the beneficiary a summary of what the trustee has done during the administration. A trust accounting report is a road map that shows a beneficiary exactly what the trustee has done to administer the trust.

If a trustee is stealing trust assets or acting contrary to the best interests of the beneficiary, the beneficiary will see that in the accounting. ​

For example, the accounting report will show:

• Property the trustee had at the beginning of the trust administration
• Money spend by the trustee
• The remaining balance to be distributed to the beneficiary  

Right #4 - Are you Getting Trust Administration Status Update Information in a Reasonable Amount of Time?

A beneficiary also has the right to make reasonable requests for the trustee to provide information and status updates about the trust administration.[5]

Trust administration is not always a quick and easy process and can sometimes take up to a year or longer. During the time the trustee is administering the trust, a beneficiary may want to know exactly what the trustee is doing.

For example, if there are multiple properties, a beneficiary can request an update on the status of the properties and what actions the trustee plans to take.

Reach Out to Us for Assistance with Enforcing Lawful Trust Administrations

If you are a beneficiary of an irrevocable trust with questions about your rights or concerns about a potentially fraudulent trustee, the attorneys at Rusconi, Foster & Thomas have extensive experience advocating for beneficiaries at all stages of the trust administration process.    

Footnotes:

[1] California Probate Code 16002(a)
​[2] California Probate Code 16061.7
​[3] California Probate Code 16061.5
​[4] California Probate Code 16062
[5] California Probate Code 16061