5 Things California Trust Beneficiaries Should Know
If you’re a trust beneficiary in California, you want to ascertain that the trust asset distribution is timely and smooth while protecting your rights. For trust beneficiaries to understand and safeguard their rights, there are several things they must know. This article outlines five things California trust beneficiaries should know.
1. Understand the trust instrument
Once you’ve been named a trust beneficiary, ask for a copy of the trust document and read it as many times as possible to understand it. Understanding trust instruments can sometimes be challenging, calling for assistance. However, you can consult a trust rights attorney to help you understand the trust terms, your rights, and your responsibilities as a trust beneficiary. They can also help you learn what the provisions mean. A trust agreement should contain the following:
- An explanation of the current distributions you may be entitled to
- A description of any extra distributions you may get at your trustee’s discretion or when specific conditions are met
- Information concerning whether these distribution provisions may change in the future
- Notification of when the trust terminates and what to do rest of the trust property once it does
While a trust agreement may contain many other relevant provisions, understanding these four gives you an overall knowledge of the distributions you’re entitled to get.
2. Trustee fees
Trustee payments are a tricky subject. While the trustee document should specify the amount for trustee fees in California, most don’t. Also, the California Probate Code says that trustee compensation should be reasonable, leaving you with the question of what reasonable could be. Different types of trustees, including corporate, private, and professional, are paid differently.
Corporate trustees usually receive a portion of the trust assets as payment, while private ones get hourly rates times the work they’ve provided towards the trust. Professional trustees typically receive an hourly rate but may sometimes get a part of the trust assets.
3. Request for information in writing
As a trust beneficiary, you have a right to information concerning trust administration status and trust assets from the trustee. You’re entitled to receipts, invoices, bank statements, and all other details relating to the trust, such as liabilities, assets, and disbursements. You also have a right to information concerning any alterations made to the trust and are entitled to learn the plan to distribute and administer the estate. Ensure the information is in writing, such as an email or a letter, and keep copies whenever you get them.
4. Ask for an accounting
The law requires the trustee to provide the beneficiary with an accounting at least annually, containing a statement of disbursements and receipts, a statement of trustee’s compensation, a statement of liabilities and assets, a description of agents hired, and a statement that you, the beneficiary, might petition the court for the accounting review within three years of receiving the accounting.
5. You can sue the trustee
You’re entitled to oppose invalid trusts or underhanded, incapable, or negligent trustees for breach of fiduciary duty. If you’re suspicious that the trust terms may be illegal or illegitimate, you’re entitled to hire a beneficiary lawyer to contest the trust in a court of law.
As a beneficiary, understanding certain things about a trust makes safeguarding its administration and your rights easier. Familiarize yourself with what California trust beneficiaries should know for a better administration process.