When you're named a beneficiary of a trust, it's natural to have questions about your inheritance and the trustee's actions. Knowing your rights is essential in ensuring transparency and fair management. Here, Andrew Byers, a Troy trust lawyer shed light on the powers and responsibilities at play.
Your Rights as a Beneficiary
- Right to Information: As a beneficiary, you have a fundamental right to be informed about the trust's assets, financial accounts, and other pertinent details.
- Right to Annual Accounting: Most trusts require the trustee to provide beneficiaries with an annual account of trust income, expenses, and distributions.
- Right to Question Trustee Decisions: If you suspect that the trustee is mismanaging funds or not acting in the best interests of the beneficiaries, you have the right to question their decisions.
- Right to a Copy of the Trust: You can request a copy of the trust document, which outlines the terms, your entitlements, and the trustee's obligations. However, under the Michigan Trust Code, a beneficiary only has a right to receive a copy of the relevant portions of the trust that describe or effect the beneficiary's interest in the trust.
Responsibilities of the Trustee
- Act in Beneficiaries' Best Interests: A trustee's primary responsibility is to manage the trust's assets for the benefit of its beneficiaries.
- Avoid Conflicts of Interest: Trustees must act impartially and avoid any situation that could benefit them at the expense of the beneficiaries. For example, a trustee should not borrow money from the trust.
- Provide Transparency: Trustees should be open about their actions and decisions, providing clarity when required.
- Timely Distributions: Trustees should ensure timely and accurate distributions as stated in the trust document.
While the responsibilities of a trustee are similar to those of a personal representative appointed in the probate court, unlike a probate estate, administration of a trust is not supervised by the court, or anyone unless, there is a problem, and a beneficiary brings the problem to the attention of the court by filing a petition. Since there is otherwise no independent oversight, that is why it is important that a trustee keep the beneficiaries informed about what is going on with the trust.
Since trusts are settled after the settlor (creator) of the trust dies and most settlors designate family members as trustee, beneficiaries should keep in mind that the trustee may be grieving the death of a loved one while attempting to settle a trust, with no prior experience in handling estates. As such, beneficiaries should not overreact to minor issues or oversights or be overly demanding on the trustee.
Seek Advice from a Troy Trust Lawyer
Being a trust beneficiary comes with rights that ensure the trustee is acting transparently and in your best interest. If you ever feel unsure about your rights or the actions of a trustee, it's essential to consult with an attorney.
Many family disputes could be avoided if the trustee would obtain legal assistance in settling the trust before a problem occurs or steps mandated by Michigan law are not followed. Attorney Andrew Byers helps trustee's settle trusts efficiently and in conformity with the terms of the trust and Michigan's trust code to avoid the trustee incurring personal financial liability for mistakes and oversights and to minimize family disputes. Feel free to call me or use the contact form on this website if you have questions about how to act as trustee.