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Bay Area Estate And Tax Planning Law Firm
Estate Planning
Trust Administration and probate

The duties of trustees and the rights of beneficiaries

| Oct 26, 2015 | Trusts |

In the world of trusts, trustees have duties and beneficiaries have rights.

What duties do trustees have?

If you have been named as a trustee for a trust, then you have many important duties that must be taken seriously, including:

The duty to administer the trust according to its terms. This means you must follow the directions given in the trust as exactly as possible and seek legal advice if there are any ambiguities.

The duty to administer the trust with due care and skill. Essentially, you have to know what you are doing and invest trust assets in a reasonable and prudent manner.

The duty to keep accurate records. You must file tax returns for the trust and report to the trust beneficiaries as the trust document requires.

The duty to treat all beneficiaries the same. It’s not the trustee’s job to choose who gets what, and all beneficiaries must be treated with equal fairness.

The duty to not use trust assets for personal benefit. Trustees are not to use trust assets for their personal benefit, nor may they comingle trust assets with their own personal assets.

As you can see, this is a lot of responsibility, which is why trustees often seek help from attorneys or financial experts in carrying out their duties.

What rights do beneficiaries have?

If you have been named as a beneficiary in a trust, you should know that you have certain rights that must be respected by the trust, trustee and/or estate. All too often, the rights of the beneficiaries are brushed off or trampled. When this happens, beneficiaries should turn to an experienced attorney for legal representation.

Not only do trust beneficiaries have the right to be treated fairly by the trustee and the right to be considered the recipient of trust assets or trust distributions, they also have the right to ask the court to intervene when the trustee is not administrating the trust as stated by the trust document. Finally, beneficiaries have the right to ask to have a trustee removed and a new trustee put into place.

In order to understand your specific rights under a trust, you will have to look carefully at the trust document. These documents are often long, complex and full of legal jargon, which is why working with an experienced estate planning attorney is almost always necessary. It isn’t until the trust document has been examined that you can fully understand your rights.

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