What Are My Rights as a Beneficiary Under a Living Trust?

What Are My Rights as a Beneficiary Under a Living Trust?

By Attorney Paul Hanks, Ironclad Living Trusts in California

You are the beneficiary under a California living trust and you feel the successor trustee is not doing a good job. What are your rights as the beneficiary under a California living trust? You may be surprised to learn that your rights as a beneficiary under a living trust are extensive.

In another Blog, this attorney set forth the many duties and responsibilities of a successor trustee in California. It is important for a beneficiary to know that the duties of a successor trustee are more than merely words in a living trust. The duties of a successor trustee are imposed by the California Probate Code and California case law. A successor trustee’s violation of those many duties is a very serious matter and can give rise to a beneficiary’s right to take the matter to court by the filing of a petition against the trustee. 

Your best ally as a beneficiary is your voice. Speak up and be assertive regarding your rights as a trust beneficiary. Press the successor trustee for information. Some of the many powerful rights you have as the beneficiary under a California living trust include the following:

• As a beneficiary under a living trust you are entitled to a notice under California Probate Code section 16061.7 regarding the existence of the trust and your right to be served with a copy of the trust. Importantly this notice must also state the deadline by which any petition contesting the trust must be filed. This statutory notice must be served on each beneficiary within sixty (60) days of the date the trust becomes irrevocable or the date of death of the trust settlor, whichever comes later.  
• Upon proper service of the notice under section 16061.7 you have a period of 120 days in which to contest the trust. Please see this law firm’s associated Blog regarding your rights and powers under Probate Code section 16061.8 to contest a trust.
• California Probate Code section 16060 imposes on the trustee “a duty to keep the beneficiaries of the trust reasonably informed of the trust and its administration.” Section 16060 is a powerful ally for a trust beneficiary. By way of example, a beneficiary can rely on section 16060 to request information from the trustee regarding multiple trust matters, including for example (1) the status of the listing and sale of a home of the estate; (2) the management and investment of assets of the estate; (3) the liquidation of financial assets of the estate such as bank accounts and brokerage accounts. 
• Related to Probate Code section 16060 is section 16061, which upon the reasonable request by a beneficiary, mandates that the trustee “provide the beneficiary with a report of information about the assets, liabilities, receipts, and disbursements of the trust, the acts of the trustee, and the particulars relating to the administration of the trust relevant to the beneficiary’s interest, including the terms of the trust.” 
• A trust beneficiary is also entitled to an accounting, and to that end California Probate Code section 16062 mandates that the trustee “account at least annually, at the termination of the trust, and upon a change of trustee, to each beneficiary to whom income or principal is required or authorized in the trustee’s discretion to be currently distributed.” 
• Within the accounting under Probate Code section 16062 the trustee must include: (1) a statement of receipts and disbursements of principal and income of the trust within the most recent complete fiscal year of the trust or since the time of the last account; (2) a statement of the assets and liabilities of the trust within that same fiscal year or since the time of the most recent trust accounting; (3) the trustee’s compensation for that same period of time; (4) the agents hired by the trustee, their relationship to the trustee, and their compensation; (5) a statement that the recipient of the account may petition the court pursuant to Section 17200 to obtain a court review of the account and of the acts of the trustee.

The foregoing listing of your beneficiary rights are merely some of the many rights of a beneficiary under a California living trust. It is important for a beneficiary to be proactive with regard to the enforcement of their rights under a living trust. Assert your rights as a trust beneficiary and do not delay. Do not rely upon verbal representations or unsubstantiated communications from the trustee. If you feel your rights as a beneficiary under a living trust have been violated, you should seek a consultation with a qualified estate planning lawyer.  

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