In Trust We Trust (a.k.a. where i$ my money!?)
As an estate planning attorney, people often ask me what rights they have when it comes to trust payments. People asking these questions are concerned whether they are receiving enough distributions (nobody has complained yet about receiving too much). Or they are concerned that the trust funds are being mismanaged by the trustee (the person, or company, who runs the trust). Many times, strained family dynamics add to the conflict and confusion. For example, imagine your long-lost aunt begins managing the assets of your recently deceased mother or father. A person, who you had little contact with in life, is suddenly responsible for managing your late parent’s assets and making (or not making) payments to you. Confronting this family member, or possibly an attorney, about the trust can be a daunting process.
What’s a guy or gal to do?
If you are the beneficiary, or future beneficiary, of an irrevocable trust in Washington state, you do have certain rights. Therefore, if the irrevocable trust was created after December 31, 2011, beneficiaries are entitled to notice of the trust. The Washington Trust Act reads:
A trustee must keep all qualified beneficiaries of a trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. Unless unreasonable under the circumstances, a trustee must promptly respond to any beneficiary’s request for information related to the administration of the trust.
The trustee can provide a copy of the trust to all beneficiaries for them to “protect their interests.” Having a copy of the trust document allows the beneficiaries to know what they may or may not be entitled to. For those who expect a future payday, they might be disappointed at this point to learn the trust assets can be completely drained before they receive any payments.
Keeping beneficiaries informed “about the administration of the trust” is a different story. There is no set method for the trustee to comply with the law. The trustee is responsible for determining how to inform beneficiaries of the administration and compliance is determined by the facts. The more information the trustee shares with beneficiaries, the more likely the trustee has satisfied the duty to reasonably inform. More information may also lead to fewer disputes and complaints from the beneficiaries. But with strained family relationships within the trustee/beneficiary dynamic, it’s possible no amount of information can quell the chaos.
Good luck out there, people. We’re all animals.
–Colin Ley is a Seattle estate planning attorney. He is also the co-founder of LayRoots along with his wife, Shreya Ley.