What Are Your Rights as a Trust Beneficiary?

As the beneficiary of a trust, it is important to understand your specific rights in order to protect your interest in trust assets.

What is a Trust and a Trust Beneficiary?

To understand trust beneficiary rights, we must first understand what constitutes a trust beneficiary. A trust beneficiary is someone who receives assets, whether it be money or property, through a trust. The person who sets up the trust is the grantor, who then gives control of the trust to a trustee. The trustee holds legal title to the assets on behalf of the beneficiary until the assets are transferred to the beneficiary. Trustees are fiduciaries who must act with the best interest of the trust and the beneficiary in mind. The trustee is the person a beneficiary should contact for information and access to the trust.

If you are the beneficiary of a revocable trust, you do not have quite as many rights as a beneficiary of an irrevocable trust has since the assets designated for you can be altered or revoked at any time.  If you are the beneficiary of an irrevocable trust, you have more concrete rights that you should be aware of.

What are Your Rights as a Trust Beneficiary?

As a trust beneficiary, you are entitled to payment pursuant to the terms of the trust’s governing documents. As long as you are a current beneficiary, you have the right to payment as described in the trust agreement. This is a relatively simple and self-explanatory right, but good to keep in mind.

You also have the right to information. This means that you can make any reasonable request for information from the trustee at any time. You are entitled to notification when the status of the trust changes, for example, if it becomes irrevocable when the grantor passes away. You have the right to see a copy of the trust documents for your review. If you do not understand something, you may ask the trustee clarifying questions. You have the right to an accounting, which is a detailed statement about all of the trust’s financial transactions and valuations. This might include bank statements, expenses, and distributions.

Finally, you have the right to request the removal of a trustee if you believe they are not acting in your (or any other beneficiaries’) best interest. This request would be evaluated by the court. You can also attempt to end the trust, though this becomes more difficult when there are several beneficiaries under a single trust.

What to Do if Your Rights are Violated

If you discover that your rights may have been violated by your trustee, you can take legal action. Removing a trustee can be a complex process that requires the assistance of an experienced legal professional. Be sure that you have reasonable proof that your rights have been violated as a beneficiary and that it can be argued you deserve compensation for that violation.

If you have any further questions about this topic, please do not hesitate to contact Ward, Shindle & Hall.