California trustees generally have a duty to keep beneficiaries reasonably informed about the administration of a trust and material financial matters affecting it. Depending on the circumstances, beneficiaries may be entitled to accountings and information about significant trustee actions, such as the sale of trust real estate.
A trustee should therefore not treat trust administration as a private matter that beneficiaries have no right to understand. Clear and timely communication can also prevent suspicion, misunderstandings, and unnecessary trust litigation.
Table of Contents
- What Information Should a Trustee Provide to Beneficiaries?
- Can a Beneficiary Ask for a Trust Accounting?
- Do Beneficiaries Have a Right to Know When Trust Property Is Sold?
- Why Is Communication So Important During Trust Administration?
- What If a Trustee Refuses to Provide Information?
- What Responsibilities Does a Trustee Have to Beneficiaries?
- Get Help With Trustee and Beneficiary Issues in California
What Information Should a Trustee Provide to Beneficiaries?
The information required will depend on the trust and the circumstances of the administration, but beneficiaries may have rights to information concerning matters such as:
- Trust assets and their administration
- Material financial matters affecting the trust
- Required trust accountings
- Significant transactions involving trust property
- Actions that may affect a beneficiary's inheritance
The firm's resource on trust accountings and beneficiary rights in California provides additional information about these obligations.
Can a Beneficiary Ask for a Trust Accounting?
In circumstances where an accounting is required and has not been properly waived, beneficiaries may be entitled to receive one.
An accounting can help a beneficiary understand what happened to trust property during the administration, including important financial activity affecting the estate.
Proper accounting also protects the trustee by creating a clearer record of how the trustee fulfilled his or her responsibilities.
Do Beneficiaries Have a Right to Know When Trust Property Is Sold?
Significant actions involving trust assets can create legitimate questions from beneficiaries. The sale of real estate is one example of an action about which beneficiaries may need appropriate information.
This does not mean a beneficiary necessarily controls every trustee decision. The trustee is responsible for administering the trust according to its terms and applicable fiduciary duties. However, keeping beneficiaries reasonably informed can be an important part of performing those duties.
Why Is Communication So Important During Trust Administration?
Poor communication can quickly create distrust.
When beneficiaries do not understand what is happening, why an asset has not been distributed, why property is being sold, or why the administration is taking longer than expected, they may begin to suspect that something improper is occurring even when the trustee has a legitimate reason for the decision.
Good communication can reduce this uncertainty. It can also help preserve family relationships and prevent disagreements from escalating into costly disputes.
What If a Trustee Refuses to Provide Information?
A beneficiary who cannot obtain appropriate information should first determine what information the trust and California law require the trustee to provide.
Depending on the circumstances, further action may be necessary if a trustee continues to withhold required information or accountings.
Beneficiaries who want to better understand their position can review the firm's guide to California beneficiary rights.
What Responsibilities Does a Trustee Have to Beneficiaries?
Communication is only one part of a trustee's broader fiduciary responsibilities. Trustees may also need to protect trust property, maintain records, address taxes and debts, prudently manage assets, and ultimately make distributions according to the trust's instructions.
The firm's California Trustee Duties and Responsibilities Guide explains these obligations in greater detail.
Get Help With Trustee and Beneficiary Issues in California
Many disputes between trustees and beneficiaries begin with unanswered questions rather than intentional wrongdoing. Addressing those questions early can help prevent a manageable issue from becoming litigation.
Kavesh, Minor & Otis assists both trustees and beneficiaries with California trust and estate administration. Understanding the trustee's duties and the beneficiary's rights can help everyone move through the administration process with greater clarity.
