Rights of a Trust Beneficiary

If you have recently discovered that you are a beneficiary of a trust, you likely have many questions. 

That’s understandable. After all, there are several types of trusts, and some may have specific stipulations or requirements. Knowing how trusts work and your basic rights as a beneficiary can help you make informed decisions.

What is a Trust?

A trust is a legal arrangement that allows an individual (grantor) to transfer assets to a neutral third party (trustee) to hold and manage on behalf of someone else (beneficiary).

Trusts are used for several reasons. They might be established to control wealth, protect assets, provide for heirs, reduce estate taxes, or support charitable causes. Trusts can also be used in planning for incapacity or avoiding probate.

Types of Trusts

There are several different types of trust, but some of the most common types include:

• A revocable trust, also known as a living trust, can be altered, changed, or revoked at any point during the grantor’s lifetime.
• Irrevocable trusts can’t be changed or terminated by anyone other than the beneficiary once they’re created.
• Charitable trusts are established for the benefit of a particular charity or the public.
• Special needs trusts benefit individuals who can’t manage their finances due to a disability. This type of trust allows the beneficiary to enjoy the use of the assets held for their benefit while also allowing them to receive government benefits.
• Spendthrift trusts are created for individuals who may be unable to control their spending. It gives an independent trustee authority to decide how funds may be spent for the benefit of the beneficiary.
• Asset protection trusts are designed to protect a person’s assets from claims of future creditors.
• Generation-skipping trusts allow for the distribution of assets to grandchildren, skipping the children.

Beneficiary Rights

In California, as a trust beneficiary, you generally have the following rights:

1. Right to information about the trust and its administration. This typically includes a right to request and receive copies of trust documents, account statements, and other relevant information.
2. Right to an accounting of trust activity, including detailed information about any income to the trust, expenses, and distributions from the trust.
3. Right to distributions as outlined in the trust agreement.
4. Right to take legal action to enforce the terms of the trust or remove the trustee if they are not administering the trust properly.
5. Right to terminate the trust if all beneficiaries agree and termination of the trust would not interfere with the trust purpose.

In addition, there may be more rights as outlined in the terms of your specific trust agreement.

Trust documents can be complex and challenging to understand. If you are a trust beneficiary, our attorneys at Lonich Patton Ehrlich Policastri can help explain the trust’s terms and how it impacts you. We can also help ensure your rights are protected and help resolve any issues or disputes. With our guidance and support, you can be assured your inheritance is in safe hands.

Consult us for a free consultation by calling (408) 553-0801.

Disclaimer: this article does not constitute a guarantee, warranty, or prediction regarding the outcome of your legal matter.