If you are a beneficiary of a Trust in California, you have legal rights. Below is a list of some of a California Trust beneficiary’s basic rights.
Obtain Copies of Trust Documents
Trust beneficiaries are entitled to receive copies of the Trust documents. Beneficiaries should receive copies of the Trust when either:
- The Trust (or a portion of the Trust) becomes irrevocable
- Upon the death of one or both of the Trust creators (“Grantors”).
Trust beneficiaries and family members (“heirs”) should expect to receive copies of the Trust by mail a few months after the last Grantor passes away. If the Trustee fails to mail copies of the Trust, the beneficiaries should request copies in writing.
Receive Notice of the Deadline to Challenge Trust Validity
Trust beneficiaries and heirs are entitled to receive a notice by mail called the “Statutory Notification by Trustee.” The Trustee must send a Statutory Notification by mail, along with copies of the Trust document, to all Trust beneficiaries and heirs of the deceased Grantor. Heirs who have been disinherited or excluded from inheritance under the Trust are still entitled to receive copies of the Statutory Notification and the Trust documents.
The Statutory Notification must contain the Trustee’s contact information. The Statutory Notification must also contain a crucial warning about the tight legal deadline to file a petition (lawsuit) in California probate court to attempt to challenge, overturn, or “contest” the validity of the Trust. An individual who petitions the court to overturn a Trust must have proof that the Trust was created or amended under suspicious circumstances, which could include coercion (“undue influence”), mental incapacity of the Grantor, financial elder abuse, and/or fraud.
The deadline to challenge the validity of a Trust in California probate court is short; a lawsuit must be filed before 120-days have elapsed since the Statutory Notification by Trustee was mailed to the person contesting the Trust. If no trust contest lawsuit is filed in court within the 120-day deadline, the Trust is legally presumed to be valid, and the heirs and beneficiaries will be forever barred from challenging the validity of the Trust in court.
Trust beneficiaries and heirs should always consult with an experienced Trust attorney regarding statutory deadlines. There are multiple types of lawsuits pertaining to Trusts, and each type of lawsuit has a different deadline. Trust beneficiaries and/or heirs should not make assumptions about statutory deadlines, or analyze which statutory deadline may apply, and should instead consult with an experienced Trust attorney immediately if suspicion arises about a Trust document (or about the Trustee’s actions).
For example, if the statutory 120-day deadline to contest the validity of the Trust has elapsed, disinherited heirs may no longer challenge the validity of the Trust; however, the named beneficiaries of the Trust are still allowed to file a different type of lawsuit against the Trustee for misconduct in the handling of the Trust assets or distributions.
Obtain Financial Information
Trust beneficiaries are entitled to receive communication and financial information about the Trust assets upon reasonable request to the Trustee. Beneficiaries may request financial records such as bank statements, real estate appraisals, closing statements, investment portfolio statements, and other financial records from the Trustee. The Trustee may need some time after the Grantor passes away to gather financial information and to gain access and authority over the Trust assets. Trust beneficiaries should read the terms of the Trust and consult with an attorney to determine if/when they are entitled to a Trust accounting.
A Trust accounting should contain some basic information including a list of Trust assets, the value of each Trust asset, the value of each beneficiary’s share, a breakdown of who has received money from the Trust accounts, a statement of any expenses the Trustee has incurred in administering the Trust, etc. The Trust terms, along with the California Probate Code, set the rules for trust accountings.
If a Trustee refuses to provide financial information for an unreasonable amount of time, the Trust beneficiaries may want to consult with an attorney about demanding an informal or formal (court-ordered) Trust accounting.
Fair Treatment by the Trustee
If there are multiple Trust beneficiaries, the Trustee may not depart from the terms of the Trust and favor one beneficiary over another. A Trustee may not depart from the terms of the Trust and unfairly benefit themselves or others. Trustees must be loyal to the beneficiaries and must follow the terms set forth in the Trust for distributing the Trust assets to the beneficiaries as the Grantor intended.
Receive Share of Trust Assets
The most important right of a Trust beneficiary is the right to receive their share of the Trust assets in accordance with the terms of the Trust. Trustees cannot withhold or refuse to distribute a Trust beneficiary’s share of the assets for an unreasonable amount of time, even if the Trustee and the beneficiary do not agree on everything. Trustees are required to follow the terms of the Trust. Unless there is a specific provision in the Trust which allows the Trustee to withhold Trust funds for some reason or a specific period of time, the beneficiaries of the Trust are legally entitled to receive their share of the assets in a reasonable amount of time.
Pursue Legal Recourse
If a Trust beneficiary’s basic rights have been abused, it becomes incumbent upon the beneficiary to take legal action. Abused beneficiaries should consult with an attorney if they believe their rights have been violated. Trust beneficiaries can sue a Trustee in California probate court for breach of fiduciary duty, which could include refusal to provide financial information, misappropriating or stealing Trust assets, failing to manage investments properly, refusing to distribute assets in a timely manner, and other abuses. A skilled Trust attorney can pursue legal action against the Trustee and help force the distribution of the Trust assets to the rightful beneficiaries.
