When a trustee operates a trust you are a beneficiary of and takes questionable, even illegal action, you may wonder what your rights are. Especially when they remove your benefits or the benefits of those you love from the trust without permission, it becomes a personal matter with legal complications.
Trust administration processes with estate plans are multidimensional and complex to decipher on your own. We would desire to explain everything you need to know about trust beneficiary rights and what to do when you notice your trustee has breached the terms of the trust.
With the help of an experienced trust lawyer, you can assert your beneficiary rights in court and work through challenging trust conflicts with your trustee.
Duties of a Trustee
A trust’s owner is a fiduciary, meaning it is their legal responsibility to manage and administer the estate plan for all beneficiary interests. This generally includes furnishing all beneficiaries with information about the trust when they require it since they must keep the beneficiaries informed on how they distribute trust assets.
Trustees must be impartial as they administer the trust and cannot favor one beneficiary over another or place personal interest ahead of them. In this case, the trustee will be acting in breach of their fiduciary duties.
Who Can be a Trustee?
The individual must be chosen by the grantor (the creator or owner of the trust) or unanimously removed or changed by the trust beneficiaries if the grantor is no longer alive. When the grantor of a trust is still alive, it is common practice for them to act as the trustee.
However, upon their death, a grantor appoints a successor trustee that takes over the trust’s administration. Keep in mind that most living trusts automatically become irrevocable upon the grantor’s death, meaning that beneficiaries cannot be changed nor added.
If a trustee desires to perform their legal duties as trustee, the beneficiaries have the right to petition the court to order them removed or replaced. If they engaged in questionable financial dealings, the beneficiaries could also request that they provide details of such transactions or seek the help of a beneficiary rights lawyer for advice on the best actions to take.
What Are My Rights as a Trust Beneficiary?
Depending on where you live, there may be differences to what beneficiaries are entitled to, but trust beneficiary rights are generally the same in most places. In California, for instance, the California Probate Law section 16061.7 makes provisions for trust beneficiaries to see the trust document. Trustees must furnish beneficiaries with copies of the trust document upon request in writing. Even in states where the beneficiary doesn’t have a right to see the trust, the beneficiaries still have the right to as much information as legally possible.
The California probate code provides the following trustee beneficiary rights to encourage transparency and smooth beneficiary-trustee relationships:
1. You have a right to know your trust entitlement
You are at liberty to know the complete details of what you are entitled to in the trust. You can read the trust document as many times as possible to acquaint yourself with the content and what you can receive, including when you should receive it.
2. You have a right to a copy of the trust document
In addition to knowing what you are entitled to, you have a right to keep a copy of the trust document for reference.
3. You have a right to ask to be informed about the trust and its administration
As a beneficiary of a trust, you have the right to a reasonable report of information about the assets, liabilities, income, bank statements, receipts, and disbursements on the trust property.
4. Right to an accounting
Beneficiaries are entitled to trust accounting. However, not all beneficiaries are entitled to an accounting. Only the current income and principal beneficiaries have the right to an accounting, so be sure to find out if you are entitled to an accounting. You can request in writing the bank statement of all transactions consummated on the trust account.
5. The right to challenge an accounting
You have the right to object to accounting and take legal action to review the accounting you receive. You will need the help of an experienced trust beneficiary attorney to challenge accounting in a probate court.
6. You have the right to be treated impartially by the trustee
If you notice that the trustee is impartial in their administration of the trust, you have to call them to order or demand an explanation. It is legally binding on the trustee to administer the trust, irrespective of their interest in the trust.
7. You have a right to question the trustee
There are circumstances where the law does not require the trustee to disclose specific details about the trust to the beneficiaries. For instance, the trustee may not need to inform the beneficiary before selling a trust property. However, they are still required to provide accurate information on such sales, including the revenues generated.
If the beneficiary is not satisfied, they may question the trustee, and the trustee has to respond within a reasonable time. Also, the beneficiaries have the right to question late distributions from the trust.
8. You can request to remove the trustee
If you think the trustee is not doing their duty correctly, you have the right to sue them. You can contest the actions of the trustee in court.
Keep in mind that not agreeing with the terms of the trust is not a reason to contest its administration. You can sue a trustee if the following valid reasons exist:
- The trustee misused or misappropriated trust assets and funds
- They acted negligently, which resulted in financial harm to the trust
- The trustee acts impartially, favoring some trust beneficiaries over others
- They withheld a due trust distribution without showing valid reasons for doing so
9. You have a right to change the trustee
The trustee can be changed, but this is where it gets tricky. As a beneficiary, if upon reviewing the trust’s records, bank statements, receipts, and invoices, and you believe that there has been gross misconduct, all the beneficiaries can petition the court to have the trustee suspended, surcharged for losses incurred, and replaced with another person.
10. You have a right to end the trust administration
Based on the terms of a trust, the trust’s beneficiaries have the right to terminate the trust administration. But again, you need the assistance of an experienced lawyer. If all the beneficiaries are over 18 years they can unanimously wish to end the trust, then they can do so and distribute the assets, whether the trustees agree or not.
Have More Questions About Your Trust Beneficiary Rights?
Our force of talented attorneys would be honored to hear your trust case over a free consultation and answer any questions you have about your rights. If you are interested in speaking with a law firm staff member, please call our office at 800.840.1998 or contact us on our website, and we would be glad to get back to you.