As a trust beneficiary, you must count on the appointed Trustee to administer the trust faithfully and responsibly. This applies to everything from communications regarding trust business to distributions of trust assets to which you are entitled. While most Trustees do fulfill their trust administration duties honestly and without issue, it is possible for a problem to arise that causes a beneficiary to question the Trustee’s intentions or ability to successfully administer the trust. If you find yourself concerned about a Trustee, do you have rights as a beneficiary? The Los Angeles trust administration attorneys at Schomer Law Group, APC explain your rights as the beneficiary of a trust.
A trust is a legal relationship where property is held by one party for the benefit of another party. The person who creates a trust is referred to as the “Settlor”, “Trustor” or “Grantor.” The Settlor transfers property to a Trustee, appointed by the Settlor. The Trustee holds that property for the trust’s beneficiaries as well as invests trust assets and administers the trust terms according to the terms created by the Settlor. The beneficiary of a trust can be a person, an organization (such as a political party), a charity (such as a church), or even the family pet. There must be at least one beneficiary but may be an unlimited number. In addition, a trust may have both current and future beneficiaries.
Trust Beneficiary Rights
Once a trust is established and funded, the beneficiaries named in the trust agreement have a legal interest in the trust assets. This is true even if the trust does not dictate that the assets be distributed yet. Your designation as a trust beneficiary alone gives you a legal interest in the trust assets and corresponding legal rights that all trust beneficiaries have by law. The trust agreement may have also conferred additional rights on the trust beneficiaries that the Settlor wanted the beneficiaries to have. The right to remove the appointed Trustee, for instance, is a right that some Settlors give to the beneficiaries through a provision in the trust agreement. Basic rights that all trust beneficiaries have, however, include the right to:
- Be informed about trust business. You have the right to be kept informed about trust business and to be able to communicate with the Trustee of the trust.
- Receive scheduled distributions. If you are a current beneficiary, you have a right to receive any distributions due to you under the terms of the trust agreement. If you are a future beneficiary, you have the right to be considered when making decisions that could impact your future distributions.
- Request an accounting. You have the right to receive a full accounting showing things such as what assets the trust holds, how much interest has been earned by the trust, and what expenses have been paid by the trust. This is an especially important right to remember if you are concerned about the way in which the Trustee is administering the trust.
- Petition a court to remove a Trustee or terminate the trust. Even if the Settlor did not specifically grant the authority to remove the Trustee to beneficiaries within the trust agreement, a beneficiary always has the right to petition a court to have the Trustee removed. To successfully petition for the removal of the Trustee you will typically need to prove:
- That the Trustee has mismanaged trust assets
- That the Trustee has engaged in self-dealing
- That the Trustee failed to follow the trust terms
- A conflict of interest
- “Good cause” (this is the “catch-all” for reasons that do not fit neatly into any of the common categories)
If you are a trust beneficiary and you are concerned about how the Trustee is administering the trust, consult with an experienced trust administration attorney right away to discuss your legal options.
Contact Los Angeles Trust Administration Attorneys
For more information, please join us for an upcoming FREE seminar. If you have additional questions or concerns about your rights as a trust beneficiary, contact the experienced Los Angeles trust administration attorneys at Schomer Law Group APCby calling (310) 337-7696 to schedule an appointment.