Communication is key between trustees and beneficiaries

On Behalf of | Jun 17, 2019 | Firm News

After the death of a loved one, actions begin almost immediately to manage the affairs of the estate. When the deceased individual incorporated a trust into their estate plan, the trustee must abide by the terms of the trust to distribute trust assets.

In California, trustees have a legal duty to inform beneficiaries of actions and progress throughout the administration of the trust. Communication between the trustee and beneficiaries is critical to ensure a smooth process. As a beneficiary, you rightfully wish to learn about key information. As a trustee, you may wish to avoid conflict and understand which matters to promptly communicate.

Matters trustees must share with beneficiaries

As a trustee, you must provide beneficiaries with sufficient information about the trust instrument, as well as with timely updates on critical actions. Generally, California law implores trustees to communicate important information, including:

  • General details about the trust. Communicate the nature of the trust, as well as its location, assets, liabilities, income and more.
  • Actions taken. Inform beneficiaries of key decisions made or actions taken, as well as disbursements made.
  • Compensation. Inform beneficiaries of any compensation for your duties from the last fiscal year.
  • Professionals hired. Communicate whether you hire an attorney, tax professional or financial adviser, as well as the pay for each.
  • Interests in the trust. Inform each beneficiary in detail of their individual interests in the trust.

Beneficiaries also have the right to request a copy of the written trust instrument. While the law does not require you to supply copies of the trust document, you must do so if requested by a beneficiary.

What to expect as a beneficiary

As a beneficiary of a trust, it may be challenging to receive infrequent or insubstantial information from the trustee. You must trust in their responsibility, judgment, character and more.

Fortunately, California law protects beneficiaries by requiring trustees to communicate throughout the trust administration process and act in the best interests of beneficiaries. When you become disgruntled with a lack of transparency or suspect poor decisions on the behalf of the trustee, you may consider discussing your options with an attorney.

For both trustees and beneficiaries, frequent, transparent communication can foster the most seamless trust administration process. Trustees should consider prioritizing proactive communication that respects the rights of beneficiaries while beneficiaries should understand their rights to learn and request such information.