Does a Trustee Have to Give a Beneficiary a Copy of the Trust?
When you serve as a trustee, you must put the trust beneficiaries' interests ahead of your own. This doesn't mean you have to do everything they want -- your choices are limited by the declaration that created the trust -- but you do have to respect their legal rights regarding the trust. In some circumstances, you have to provide the beneficiaries with information about the trust and your management of it.
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Revocable Trusts
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When a settlor, or trust creator, sets up a revocable living trust, she retains the power to change or cancel the trust at any time. In many cases, the settlor appoints herself as trustee to keep managing her assets. If you're the trustee, the law doesn't require you to tell beneficiaries anything about how you're managing the trust, even if they insist. You don't even have to divulge that the trust exists or who the beneficiaries are.
Irrevocable
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The law for irrevocable trusts is different. Settlors can start with an irrevocable trust, which gives them tax benefits, but even a revocable trust becomes irrevocable once the settlor dies. If you become trustee of an irrevocable trust, you do have to inform the beneficiaries that the trust exists and tell them who the beneficiaries are. If a beneficiary requests a copy of the trust instrument -- the document that spells out the terms of the trust -- you have to provide it.
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Accounting
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Your obligations to the beneficiaries include not only providing them with a copy of the trust but with details on how you're managing it. Beneficiaries are entitled to a written report about the trust income and expenses; the value of the assets; how much you receive for managing the trust; the names of any professionals you've hired to help you, such as lawyers or stockbrokers; the professionals' relationship to you; and how much the trust pays them. You're obligated to present a report, on request, at least once a year.
Confrontation
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If a beneficiary believes you're violating your fiduciary duty -- your obligation to manage the trust selflessly -- he can take his complaints against you to court. If you fail to notify a beneficiary when you're obligated to, or refuse to provide information about the trust, a beneficiary can request the court to order you to comply. Should the beneficiary conclude you're mismanaging the trust -- either through fraud or incompetence -- he can ask the court to replace you.
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