Do you know your rights as a beneficiary of a family trust?

In order to pass on and protect a family’s wealth, many will create an irrevocable family trust. If you find yourself to be a beneficiary of it, you may feel as though you are at the mercy of the trustee.

You need to know that you have rights as a beneficiary. If you feel as though something just isn’t right, you could have a point. It may help to know what your rights as a beneficiary are and what steps you can take to rectify the situation.

Your rights

Being the beneficiary of a trust entitles you to the following:

  • Part of the trustee’s duties involves preparing regular accounts of the assets in the trust, the income the trust generates and its expenditures. You also have the right to request a special accounting.
  • You may have access to distributions from the trust in accordance with its terms and provisions.
  • You have the right to replace the trustee under certain circumstances. For example, if you believe that the trustee isn’t keeping your best interests in mind, you may be able to remove him or her and appoint a trustee who will keep your interests in mind.
  • As a beneficiary, you may be able to terminate the trust. The fact that it is irrevocable applies more to the person who created the trust than its beneficiaries. You may be able to obtain consent from all of the applicable people in order to dissolve the trust.

If any of these circumstances exist in your case, you may be able to rectify the situation, but it may require litigation to do so. You don’t necessarily have to start with litigation, however. You may be able to negotiate with the trustee to get things back on track.

Prepare to go to court

Regardless of whether your claims involve a trustee who you believe misappropriated funds from the trust or may have otherwise mismanaged its assets, you suffered losses due to the trustee’s breach of duty to you. The problem is that, if a trustee is willing to ignore his or her duties to you as a beneficiary, negotiations may not be fruitful. In that case, your next step may be to seek help from a California court. You may increase your chances at success if you involve an experienced trust litigation attorney.

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