Don’t Be Left in the Dark – Part Two

In Part One of this series, we discovered that some beneficiaries do not receive adequate communication about their inheritance, while some trustees and executors have obligations they must fulfill, while acting in the best interest of the beneficiaries. What obligations do trustees have and what rights do Trust beneficiaries have?

First, within 60 days of a Trust becoming partly or fully irrevocable (e.g. upon the death of the person who established the Trust), trustees must send a “Trustee Notification,” containing certain prescribed information about the trust administration, to all beneficiaries and heirs. This mandatory notification informs the recipients, in part, that they may request a full and complete copy of the Trust. Of course, every recipient should make this request and then read the Trust carefully.

The trustee also has a fiduciary duty – that is, a duty to act in the best interest of all of the Trust beneficiaries, A trustee has specific duties, including to timely: keep the beneficiaries reasonably informed; provide an accounting of the Trust assets, income and expenses; faithfully follow the Trust terms and conditions; and distribute to the beneficiaries their Trust shares.

Often, I hear from clients, prospective clients and professional advisors about beneficiaries who are being kept in the dark about their inheritance. Sadly, some beneficiaries mistakenly think that their only choice is to wait indefinitely and hope that the trustee eventually provides them with material information and distributions.

I have been hired to advocate for many Trust beneficiaries. In most cases, after I make reasonable requests of the trustee or his attorney, things resolve amicably. Litigation is infrequently necessary. Fortunately, when litigation is initiated, Judges tend to be sympathetic to beneficiaries who have been ignored or mistreated, and harsh on trustees who have been recalcitrant.

Trust and (Probate/Estate) beneficiaries should not be shy about hiring an attorney to be advised about: their rights and the Trustee’s obligations; and what demands should be made to ensure that their rights are protected.

This article is intended to provide information of a general nature, and should not be relied upon as legal, tax, financial and/or business advice. Readers should obtain and rely upon specific advice only from their own qualified professional advisors. This communication is not intended or written to be used, for the purpose of: i) avoiding penalties under the Internal Revenue Code; or ii) promoting, marketing, or recommending to another party any matters addressed herein.

Mr. Silverman is an attorney with R. Silverman Law Group, 1855 Olympic Blvd., Suite 125, Walnut Creek, CA 94596; (925) 705-4474; rsilverman@rsilvermanlaw.com.

ESTATE LEGAL SERVICES: Need to find an estate planning attorney in Walnut Creek CA? Contact Robert Silverman at 925-705-4474 for legal advice on Revocable Living Trust, Wills, Durable Power of Attorney, Advance Health Care Directive, Special Needs Trusts, and Irrevocable Trusts & Advanced Estate Planning, including Irrevocable Life Insurance Trust (ILIT), Qualified Personal Residence Trust (QPRT), Defective Grantor Trust (IDGT), Grantor Retained Annuity Trust (GRAT), “Crummey Trust”, and various types of Charitable Trusts.