As the beneficiary of an irrevocable family trust, you have a few inherent rights. When you're learning how to deal with the trust-management company, it can be challenging to determine what you can and cannot do. Here's a look at a few things that you are legally entitled to as beneficiary of a living trust.
As a beneficiary of the trust, you'll be entitled to financial payments from the trust. If you're not sure how much you're eligible to receive, the trust schedule will detail your payments. You can also talk with your trust manager about the payment schedule that's in place. In most cases, it's defined as either a flat rate every month or as a percentage of the total balance every month. You may even have a right to request an additional withdrawal under certain circumstances.
As a beneficiary of the trust, you also have the right to request copies of the records that detail all of the transactions for the trust. You can review the assets, liabilities, and contribution history any time you want to. Most trust-management companies will provide these on a monthly basis anyway because most beneficiaries want to see those statements on a regular basis. You can even request to receive copies of the bills that have been received and paid by the trust.
Every source of money needs to be disclosed, including private contributions as well as any revenue from rental properties or asset sales. Make sure that you review these statements every month and ask questions about any transactions that you don't understand. This is essential because it helps you to fully understand what's being done with the money so you can spot concerns.
When you are the beneficiary, the trustee of the irrevocable family trust is technically working for you. That means you have the right to replace him or her if you feel that they aren't doing their job to your satisfaction. Remember that the trustee's job is to act in your best interest. It's up to you to hold him or her to that requirement. Make sure that all of your expectations are clear because that's key to ensuring that your trustee is equipped to fulfill the needs of your account.
You may find that working with a trust-management company is more beneficial or gives you more options to ensure that the trust is handled correctly. You can take time to talk with the management company about your needs and any potential concerns you might have, such as investment potentials or expenses that you want prioritized.
Termination of the Trust
As a beneficiary, you may even have the legal right to terminate the trust at some point. There are usually stipulations, and those can vary by state. If there is a provision in place for you to terminate the trust, there will be information in the trust document, and your trust manager will know about them as well. Sometimes the trust closure has to be approved by the court. Your trust manager or management company can tell you whether you're eligible according to the stipulations of your trust document and your state's laws.
Understanding your rights as the beneficiary of a trust is the only way to ensure that you're getting what you're owed. The information here will help you to better understand the requirements of your trust manager or trustee as well as the expectations that you can reasonably have about your role and the funds you can access. Talk with your trust manager and read the entire trust document for more important details.
Talk to a company like Home State Bank for more information.