Irrevocable Trust Beneficiary Rights in California
Did your parent or grandparent use a trust for their estate planning? Are you wondering what your rights are now that they have passed away? When a trust becomes irrevocable, the beneficiary’s rights are quite powerful under California law.
When You Get Your Rights as Trust Beneficiary under California law
While your loved one is alive, you don’t have any rights as a trust beneficiary unless the trust was created as an irrevocable trust. That’s very uncommon unless there is some sort of special case planning going on. That would include very large estates (estates large enough to be subject to estate taxes), Medi-Cal planning, and plans for children with special needs.
What most commonly happens is a trust is created as a revocable trust. It becomes irrevocable when the person or people who created the trust die.
Your Rights as the Beneficiary of an Irrevocable Trust
When a loved one dies, and you believe you will inherit, there are always several questions and desires to ensure you receive your rightful inheritance. The way to do that is to know your rights as the beneficiary of an irrevocable trust. And to enforce those rights.
Nearly every trust beneficiary wants the same three things:
- A copy of the trust,
- The trustee’s plan to administer and distribute the estate, and
- The ability to review the trust’s finances.
In purely technical terms, you don’t have rights as a beneficiary. The trustee has duties. In practice, those duties mean the trustee must perform specific tasks, and failing to do those tasks allows you to go to court. So, in practice, you do have rights as a trust beneficiary.
Your Right to Get a Copy of the Trust
People commonly believe the trustee must send them a copy of the trust after the death of their loved one. That’s false. The trustee must send you a notice that they have become trustee due to the death of the person or people who created the trust. They are required to send that notice within 60 days of becoming trustees. The notice must tell you that you are entitled to get a copy of the trust by making a reasonable request. But the truth is that many trustees don’t tell you.
The good news is that if you send the trustee a written demand for a copy of the trust, whether or not they gave you the proper notice, they have 60 days to send you a copy. If 61 days go by and you have yet to receive your copy, then a petition can be filed in probate court to order the trustee to provide you with a copy of the trust. So, that 60-day period is your key to getting into probate court. If 61 days have passed, it’s time to talk with an attorney.
Your Right to Know the Trustee’s Plan to Administer and Distribute the Estate
Under California Trust Law, your trustee must keep you reasonably informed about the administration of the trust. What this means in practice will vary from one trust to another. At a minimum, your trustee should tell you what assets are in the trust and any potential problems the trustee believes may arise during the trust administration.
At the beginning of trust administration, your trustee may have limited detail. For example, they may only be able to tell you there is a house and brokerage account without being able to give you details on the asset’s values. Further along, they should be able to provide detailed information about asset values and also let you know about liabilities such as a mortgage on a house or loans secured by the account.
Your trustee should also be able to give you approximate time frames when certain tasks will be done. For example, the house will be emptied in the next month, repairs and cleaning will be done in the following two months, and the home will be listed for sale the month after. Plans may change if unexpected things occur. That’s okay if your trustee is addressing items needing attention. It is a problem though if things get pushed back because your trustee won’t get anything done.
The danger to a beneficiary is if there is no plan and no information is provided. Suppose your trustee won’t communicate with you. In that case, a petition can be filed to instruct the trustee to take necessary actions or remove the trustee. Suppose your trustee is not communicating with you despite your efforts to communicate with the trustee. In that case, it’s time to talk with a lawyer.
Right to Detailed Financial Information About Trust Assets
Your trustee must account for you. In the world of trusts, an account combines a balance sheet and an income and expense statement. A trust account tells you the assets the trust owned on the date of death and their values, all property received by the trust, all income received by the trust, all disbursements made from the trust, and all property on hand at the end of the accounting period. All entries showing anything coming into the trust or out of the trust must report the date, the person or entity, the amount, and the purpose or reason for whatever came in or went out.
What your trustee does not have to do is give you all the underlying records for the account. If you believe the statement is inaccurate or falsely report the trustee’s actions. Your attorney can object to the account for you and litigate it. During litigation, your attorney can get access to the underlying records. When used, your rights as the beneficiary of an irrevocable trust are pretty powerful. And they must be used to obtain your rightful inheritance.
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