There are many examples of bad Trustees either failing or refusing to keep the Trust beneficiaries reasonably informed. Under Probate Code section 16060, the Trustee has a duty to keep the beneficiaries reasonably informed of the Trust and its administration. Further, under section 16060.7, the Trustee has a duty to provide the terms of the Trust to a beneficiary when requested to do so. Finally, section 16061 obligates the Trustee to provide requested information to the beneficiaries regarding the Trust administration.
If you take those three Probate Code sections and put them together, they require a Trustee to (1) tell the beneficiaries of relevant information about the Trust administration, (2) provide a copy of the trust document upon request, and (3) provide all relevant information/documents upon request. Of course, this all makes sense because a Trustee is supposed to be acting in the best interests of the beneficiaries. As a result, the Trustee’s actions should be transparent.
And yet, far too many beneficiaries are being kept in the dark. Why? It usually begins with an ignorant Trustee. Trustees who do not know that they have these duties to disclose information may think they don’t have to do so. Many individuals who take over as Trustee have the mistaken belief that they are stepping into the shoes of the Trust settlors. Meaning, they think they can do whatever they like and that they have no duty to disclose information. That may have been true when the Trust settlors were alive and the Trust was revocable, but once a Trust becomes irrevocable the duties described above apply.
Sometimes a Trustee feels attacked when a beneficiary asks for information. They think that they have to defend themselves by refusing to provide financial documents, trust documents, or relevant trust information. This is false, of course, but it can be hard for a defensive Trustee to see the light without court intervention.
There is one sure-fire way to obtain disclosure from a Trustee. Take them to court! Of course, lawyers would say that. But it’s true. By filing a petition in Probate Court, you can ask the judge to order the Trustee to hand over information. Also, once you file in court you have access to subpoena power. That means you can send subpoenas directly to the financial institutions that hold Trust assets and obtain the financial documents directly from them.
Eventually, the information can be obtained. The only question is: how hard will the road to information be? In a perfect world, every beneficiary would receive the information to which they are entitled. In our world, however, many beneficiaries have to fight for basic Trust information.
