5 Rights that Trust Beneficiaries Have
Below is a good article from Elder Law Answers on one of the big questions that we get about trust beneficiaries. Specifically, what are the major rights that a trust beneficiary has? Here are five rights that trust beneficiaries have in Leawood. These questions are good to think through and help you as a beneficiary to see whether the trustee is meeting the most basic parts of the trust.
See our Youtube Channel page here.
See our Pinterest page here.
5 Rights That Trust Beneficiaries Have
A trust is a legal arrangement through which one person, called a “settlor” or “grantor,” gives assets to another person (or an institution, such as a bank or law firm), called a “trustee.” The trustee holds legal title to the assets for another person, called a “beneficiary.” The rights of a trust beneficiary depend on the type of trust and the type of beneficiary.
If the trust is a revocable trust”meaning the person who set up the trust can change it or revoke it at any time–the trust beneficiaries other than the settlor have very few rights. Because the settlor can change the trust at any time, he or she can also change the beneficiaries at any time. Often a trust is revocable until the settlor dies and then it becomes irrevocable. An irrevocable trust is a trust that cannot be changed except in rare cases by court order.
Beneficiaries of an irrevocable trust have rights to information about the trust and to make sure the trustee is acting properly. The scope of those rights depends on the type of beneficiary. Current beneficiaries are beneficiaries who are currently entitled to income from the trust. Remainder or contingent beneficiaries have an interest in the trust after the current beneficiaries’ interest is over. For example, a wife may set up a trust that leaves income to her husband for life (the current beneficiary) and then the remainder of the property to her children (the remainder beneficiaries).
- Payment. Current beneficiaries have the right to distributions as set forth in the trust document.
- Right to information. Current and remainder beneficiaries have the right to be provided enough information about the trust and its administration to know how to enforce their rights.
- Right to an accounting. Current beneficiaries are entitled to an accounting. An accounting is a detailed report of all income, expenses, and distributions from the trust. Usually trustees are required to provide an accounting annually, but that may vary, depending on the terms of the trust. Beneficiaries may also be able to waive the accounting.
- Remove the trustee. Current and remainder beneficiaries have the right to petition the court for the removal of the trustee if they believe the trustee isn’t acting in their best interest. Trustees have an obligation to balance the needs of the current beneficiary with the needs of the remainder beneficiaries, which can be difficult to manage.
- End the trust. In some circumstances, if all the current and remainder beneficiaries agree, they can petition the court to end the trust. State laws vary on when this is allowed. Usually, the purpose of the trust must have been fulfilled or be impossible.
[dyna dynami=”2d to end para”]
[weather city=”Leawood” state=”Kansas”]
[dyna dynami=”end para”]
See our directory page here and here.