Does a Beneficiary of a Living Trust Have the Right to See the Trust?

By Joe Stone

All trusts, including living trusts, are established to benefit certain individuals or organizations identified in the trust, called the beneficiaries. The person creating a living trust is typically the first and only beneficiary of the trust and, of course, will have access to the trust document. However, the contingent beneficiaries — those individuals or organizations who receive the trust property when the maker of the trust dies — generally only have the right to review the trust when the maker dies and the trust is no longer revocable .

All trusts, including living trusts, are established to benefit certain individuals or organizations identified in the trust, called the beneficiaries. The person creating a living trust is typically the first and only beneficiary of the trust and, of course, will have access to the trust document. However, the contingent beneficiaries — those individuals or organizations who receive the trust property when the maker of the trust dies — generally only have the right to review the trust when the maker dies and the trust is no longer revocable .

Living Trust Basics

A written document called a declaration of trust or trust agreement is used to establish a living trust. The person making the trust is called the trustor or settlor. In a typical living trust, the trustor appoints himself as trustee and names himself as the initial beneficiary. Some or all of the trustor’s property is transferred to the trust. During the trustor’s lifetime, the trust property is managed by and for the benefit of the trustor in his capacities as trustee and beneficiary. The hallmark of the living trust is that the trustor can amend or revoke the trust during his lifetime. Obviously, in his capacity as beneficiary of the trust, the trustor will have access to the trust document.

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Contingent Beneficiaries and Successor Trustee

A living trust also names contingent beneficiaries, who are the individuals or organizations that become the trust beneficiaries when the trustor dies. The trust document will also name a successor trustee who is to take control of the trust property when the trustor dies. However, during the trustor's lifetime, the contingent beneficiaries and successor trustee have no rights or responsibilities under the trust because the trustor could still exercise his right to amend or revoke the trust. When the trustor dies, the trust can no longer be revoked or amended and the contingent beneficiaries acquire the right to receive the benefits of the trust. The successor trustee will then have the responsibility to see that the provisions of the trust are carried out.

Settling the Trust

The successor trustee of a living trust is responsible for settling the trust when the trustor dies. Each state sets forth its own laws on the duties of the successor trustee to settle the trust and the beneficiaries' rights regarding the settlement process. In general, the beneficiaries have the right to an accounting and information from the successor trustee, unless the trust document specifically limits the beneficiaries' rights in this regard. In any event, the successor trustee should communicate with the beneficiaries on a regular basis about settlement and administration of the trust.

Review of Trust Documents

Conflicts between contingent beneficiaries and the successor trustee occur for a variety of reasons and, in some case, result in the beneficiaries' demanding to review the trust document. In some states, such as Connecticut, the beneficiaries have the right to review and receive a copy of the entire trust document. In other states, including Arizona, the beneficiaries are limited to receiving that portion of the trust document sufficient to describe the beneficiaries' interest in the trust property.

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References

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