Q: My siblings and I are beneficiaries of a trust that is managed by our uncle. The trust was set up by our grandparents who passed away. We can’t get any information about the trust and aren’t sure that he is doing what he is supposed to be doing. How can we get information without resorting to going to court?
A: Lack of communication between a trustee and a beneficiary isn’t unusual. Remember that often times, trusts are set up to put a responsible person between loved ones and a pile of money. That sort of relationship sometimes leads to mistrust between the parties. The Trustee is trying to do what the Settlor wanted and the beneficiaries want to make sure that they are getting everything they are entitled too. These two goals sometimes don’t always align.
Personally I think most issues involving trustees and beneficiaries are the result of misunderstanding and a lack of communication. Rarely do I see a trustee actually doing anything inappropriate. I won’t say it never happens, but I think it is usually the exception rather than the rule.
I would start by reaching out to the trustee. The trustee may not be aware that you are having issues with the administration of the trust. Simply have a conversation. Don’t make it confrontational. There will be time for that later if things don’t get resolved.
In most cases, you are entitled to a copy of the trust agreement so request a copy. Review the terms of the agreement and then review them again. Make sure that you understand your rights and the trustee’s obligations. Before you accuse the trustee of anything, make sure you understand the situation.
If after reviewing the agreement, or if the trustee won’t give you a copy of it, you can’t resolve the issues; you might have to contact an attorney. Sometimes a letter from an attorney will carry a little more weight. Not always, but sometimes.
Finally, I know that you said you didn’t want to involve the courts, but you might not have a choice. If all else has failed, you might be forced to ask a judge for help. There are legal options available to a beneficiary if things get ugly.
Remember that trusts are legally enforceable documents that provide certain rights and obligations. If one of the parties won’t do what they are supposed to do, the other party has rights that can be enforced. Obviously litigation should be the last step, but it is a step that is available.
Christopher W. Yugo is an Attorney in Crown Point Indiana. Chris’ Estate Planning Article will appear every Sunday in the Times. Address questions to Chris in care of The Times, 601 W. 45th Ave., Munster, Indiana 46321 or to Chrisyugolaw@gmail.com. Chris’ information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.