If you have been named as the successor Trustee for a loved one’s Revocable Living Trust, the level of communication you provide to all Trust beneficiaries is important. Beneficiaries who feel you are not keeping them up-to-date on the affairs of the Trust may make your trustee duties more difficult. In fact, based on my experience, change “may” to “will” in the previous sentence.
Minimum Requirements
As Trustee, you are required to keep beneficiaries sufficiently updated on the affairs of the decedent’s estate. State law requires you to provide heirs with notices regarding certain Trustee actions. If you are unsure what notices are required, speak with your attorney. It is especially important to keep beneficiaries notified of major Trust developments such as the sale of real estate.
As Trustee, record keeping is vital. Even if you don’t share every aspect of the estate with beneficiaries, you should still keep accurate accounting records in case your actions may be questioned. And you should never use Trust assets for your own benefit.
Going Beyond the Minimum
A great Trustee not only meets the minimum requirements of law regarding communication with beneficiaries, he or she goes beyond the minimum to assure all beneficiaries the Trust is being handled properly.
Although it is not required, it is a good idea to meet with beneficiaries and go over what the Trust owns and what your are doing to preserve those assets. Explain to them what your duties are, what you plan to do and about how long you think the process. If geography makes a meeting difficult, consider sharing this information in written form.
Sharing the Trust agreement with all beneficiaries is a good idea. Beware, doing so could lead to beneficiary problems. A beneficiary may be upset at how much of an inheritance he or she is receiving or how that inheritance is being dispersed. For example, the Trust maker may decide to leave some inheritances outright while creating a Trust for other heirs. This may be because the Trust maker feels those beneficiaries need a proper way to manage their assets. Tread lightly when you see such red flags within the Trust agreement.
As you go through the process of estate settlement, you may find some beneficiaries more interested in your actions than others. Although they may irritate you, it is best to answer their questions. If you don’t, it may appear that you are hiding information.
Larry Parman
Attorney at Law
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