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. 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. 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. 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. 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:
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.
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.
1/14/2022 05:07:00 pm
I appreciate that you explained when the trust becomes irrevocable, the designated trustee is in charge of its administration. My best friend is looking for some info, this should help him. I appreciate that you helped me learn more about trust lawyers.
4/12/2022 07:48:31 pm
It's great that you elaborated that it is not an easy and quick process to fix the trust administration process. A couple of weeks ago, my uncle told me that he was planning to fix his trusts plan for his future retirement plan, and he asked if I had any idea what would be the best option. You did a great job explaining the importance of planning, I'll be sure to consult a trust lawyer as they can help with the living will documentation process.
Thanks for helping me understand that requesting a copy of the trust document would be a right of the beneficiary. I will share this information with my best friend so that she can request it if she really is a beneficiary of her parents. She should also consult with a trust litigation lawyer if ever there are issues in the process, because she must be the only person with the right for this due to being an only child.
4/19/2023 03:07:10 am
I liked how you wrote that beneficiaries have the right to take part in the trust administration process. My friend is confused about their trust processes. I think it's best for them to turn to a trust attorney for proper guidance.
4/19/2023 11:03:50 pm
Thanks for sharing this marvelous post. I'm very pleased to read this article. I enjoy this site – it's so useful and helpful.
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