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3 things a trustee should communicate to beneficiaries

On Behalf of | Aug 14, 2023 | Trust & Estate Litigation

A trustee needs to communicate with beneficiaries about crucial matters, as required by law. Therefore, if the trustee of a trust for which you’re a beneficiary fails to keep you reasonably informed, you can take legal action against them.

Let’s look at some key information that trustees are typically required to provide beneficiaries.

Right to a copy of the trust

When the settlor of a trust dies, a trustee needs to notify beneficiaries of their acceptance of the trusteeship along with their contact information. This notice should also inform beneficiaries of their right to request a copy of the trust document(s). The copy will allow beneficiaries to obtain more information about the trust (such as assets, liabilities, bank statements and the details of the trust administration) and any amendments made to it.

Annual trust reports

Trustees have an obligation to provide beneficiaries with in-depth reports annually until the trust is terminated. A report should include the assets’ market values, gains and losses, expenses/fees incurred, receipts and disbursements. Further, it should outline the trustee’s objectives for the future and how they plan to achieve specified activities.

If a trustee fails to provide beneficiaries with such a report, they can go to court to request an accounting of the trust investments.

A change in the rate of compensation

The responsibilities of a trustee may significantly differ from those included in the trust. They may perform more duties than anticipated, for instance, if the trust is complicated. In such a case, they can request the court to change their rate of compensation. However, they need to inform beneficiaries of this first.

Dealing with a trustee who won’t communicate can be challenging. It will be best to get legal guidance to protect your rights.