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By Liza Horvath


Self-protection Checklist for Estate Beneficiaries


Beneficiaries of estates – whether a trust is used or a will is probated, have rights. Unfortunately many are not aware of their rights nor do they know what steps they should take to continually protect those rights.


As an example, if mom and dad use a trust for their estate plan, this document governs what happens to their assets during their lifetimes and also at their death. While mom and pop are living, they (usually) are the trustees of their trust but when one or both die or should they become incapacitated, the successor trustee named in the document steps in to manage the assets according to the terms of the trust. When this successor trustee steps in, beneficiaries of an estate have certain rights. Like all legal issues, the way the document reads and whether mom and dad are deceased or incapacitated, are all factors in determining the rights of a beneficiary at a given time. Here is a basic checklist of actions you can take to protect your inheritance:


First, ask questions. Mom and dad may have named their attorney, a trusted friend or a bank as their trustee and some beneficiaries are reluctant to seek information about the estate and the trustee’s intended actions. They may feel like, “Who am I to ask questions of this important professional?” Well, as Susan Jeffers, Ph.D., puts it in her book of the same title, “Feel the fear but do it anyway.” It may be easiest to say to the trustee that you do not know what information you are entitled to, but would they tell you? If you do not get a satisfactory response, be insistent. If you are still getting stonewalled you may need to seek legal counsel.   


One thing to remember is to keep copies of the trust document – if mom and dad did not give you a copy, ask the trustee for one. In most cases, you are allowed, by law, to have a copy and, with a copy in hand, you can better understand the terms. Also, if it ever comes to having to shop for a new trustee due to unsatisfactory service, you will be in a much better position because the trust will set forth how you can replace a trustee with a new one.     


Trustees serve in a fiduciary capacity and, as such, must be loyal and administer the trust solely in the interest of the beneficiaries. They cannot, for instance, sell trust assets to a friend at a discount or comingle their personal assets with the assets of the trust. They are required to notify beneficiaries of certain actions they intend to take and seek the beneficiary’s approval. Finally, trustees cannot favor one beneficiary over another – they must deal with all beneficiaries impartially. Other duties are outlined in the California Probate Code beginning at section 16000.


Lastly, do not give up your right to an accounting: Trustees are obligated to provide beneficiaries with an accounting of their actions which includes a list of the assets they are responsible for managing, income received and expenses paid. Sometimes a trustee will ask beneficiaries to waive their right to an accounting – do not do it. Once waived, seldom can you get this right back and you should keep tabs on what is going on – you have the right to the information.


While the above is a good start, getting the advice of an attorney is always your best bet when dealing with trusts or estates. 

Liza Horvath has over 30 years experience in the estate planning and trust fields and is the president of Monterey Trust Management, a financial and trust management company. This is not intended to be legal or tax advice. If you have a questions call (831)646-5262 or email liza@montereytrust.com










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