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Rights of Beneficiaries of a Trust

rights of beneficiaries of a trust
Beneficiaries of a trust have the right to:

      • Receive current and truthful information about the trust
      • Get the entire share of the trust that they are entitled to
      • Receive a timely distribution of their share of the trust
      • Compel the trustee to provide a formal judicial accounting
      • Have the court remove a trustee who is using the trust for their own gain

Information About the Trust

If the trustee is not giving you information about the trust when asked, they may be hiding something. If you have that suspicion, it’s best to consult with a New York trust attorney. We might send them a letter on your behalf, explaining that you have rights and that failure to provide information can result in the removal of the trustee from the trust.

The Entire Share of the Trust

It does not matter how the Trustee feels about it. The trust is not their personal property or business. They are just there to do a job – to find all of the assets of the trust and promptly distribute the assets to creditors and beneficiaries of the decedent. The trustee cannot keep any of it or give it away to their friends or relatives. They are only entitled to commissions and their own share as a beneficiary.

Rights of Beneficiaries to Receive a Timely Distribution of  Their Share

Every month of delay costs the beneficiary loss of use and enjoyment of their share of the trust. If the trustee is taking too long, a trust attorney can go a long way in showing them that distributing the trust to the beneficiaries should be a priority.

Inventory of the Trust

Beneficiaries have the right to receive an Inventory of the trust (not to be confused with a formal accounting) within nine months of the appointment of the trustee of the trust. An Inventory is something that should just be filed – the beneficiary should not have to ask for it. Some trustees s make a mistake of just filing the Inventory with the Court and not automatically sending a copy to the beneficiaries. It’s always a good idea to ask the trustee for an inventory before deciding whether or not to proceed to the next step.

Rights of Beneficiaries to Compel a Trust Accounting

A trust accounting is a document that details every transaction that occurred in the trust and provides some summaries and explanations of the transactions. The document consists of various schedules in a court-approved format and complying with general accounting standards. At a minimum, the trust accounting includes schedules listing line by line all of the assets that are a part of the trust, all of the expenses of the trust, all income of the trust, and proposed distributions of the trust.

Trustees s of a trust do not have an automatic obligation to file an accounting of the trust. But once the beneficiaries request an accounting, in many trusts trustees have to provide one.

If a beneficiary and a trustee agree to an informal accounting, it might work, as long as the beneficiary is satisfied, they have all the information. When a trustee files an informal accounting, they don’t have to file it with the court. They can just provide it to the beneficiaries. A trustee may ask a beneficiary to approve an informal accounting before the trustee makes distributions of trust funds.

If the beneficiary is not satisfied with an informal accounting, they can ask for a formal accounting. If the trustee fails to provide one, the beneficiaries can compel the trustee to provide one. If the trustee is ordered by the court to provide an accounting, they usually do or get removed by the court. Sometimes they provide an incomplete or fraudulent accounting. Beneficiaries can sue to challenge those accountings and get the money that the trustee may be keeping from the beneficiaries.

If you are looking for a New York trust attorney who protects the rights of beneficiaries of a New York trust, you can call Albert Goodwin, Esq. at (212) 233-1233.