Legal trusts are common in California, as many want to ensure their earnings and assets are secure and ready to be passed down to future generations. Unfortunately, while individuals create trusts for various reasons, many are uninformed regarding the rights of the beneficiaries of a legal trust.

While many trustees and beneficiaries focus on the rights of the trustee and the trustee-beneficiary, they ignore the fact that beneficiaries have rights too.

In California, beneficiaries of legal trusts hold many vital rights, from the right to view certain documents to the ability to receive the proper share of the trust’s assets, per the trust agreement.

In this article, our Los Angeles civil litigation attorney outlines the basic rights that trust beneficiaries have in California.

The Right to Receive the Correct Share of Assets

The most important duty of a trustee is to distribute the trust’s assets to the beneficiaries under the trust agreement’s terms.

In keeping with that, the most vital right of a beneficiary is to receive their share of the trust’s assets. Trustees cannot decide not to distribute assets to beneficiaries. They also cannot hold onto the assets instead of providing them to beneficiaries.

Even when the trustee and beneficiary are locked in conflict, the trustee must deliver the assets to the beneficiary. Trustees must behave according to the trust, and unless a specific provision in the trust warrants withholding assets, they must deliver them.

Beneficiaries must be aware of their right to be compensated in this manner. If they do not receive the assets from the trust or the correct amount of assets, they should immediately contact an experienced trust attorney.

• The Right to Receive Copies of Trust Documents

Beneficiaries should also be aware that it is their right to obtain copies of official trust documents. While beneficiaries reserve the right to access these documents at any time, there are two occasions when they often request access to the trust forms.

The first occasion occurs when the trust, or a portion of it, becomes irrevocable. When a trust is irrevocable, it cannot be modified without the beneficiaries’ consent.

The second occasion when beneficiaries commonly request trust documents occurs when the trust creator or creators passes away. The trust creators are usually referred to as “grantors.” When a grantor passes away, beneficiaries should be mailed copies of the trust after 2-3 months.

Importantly, if a beneficiary finds they cannot access any of these documents, they can request copies in writing. Again, a licensed attorney can help beneficiaries with trouble accessing these important forms.

All beneficiaries should be able to access other trust documents, including financial statements. The trustee should keep a careful record of all of the trust’s financial information, and it should be readily accessible. We’ll provide more detail about this in the next section.

• The Right to View Financial Documents

Trust beneficiaries should receive financial documents detailing the trust’s assets, and these should be available upon reasonable request.

What can beneficiaries request? Those who are named beneficiaries of a trust can request the following:

• Bank statements
• Investment portfolio documents
• Real estate appraisal forms
• Closing statements on properties
• Additional financial records

All trustees hold different assets, and trustees should be aware of the state of their assets. For example, if the trustee, in keeping with the trust’s instructions, invests a certain amount of money, the beneficiaries should be aware of the action. Likewise, beneficiaries should be aware of payments made to the trust and expenses of the trust.

If the Grantor dies, the trustee is allowed a reasonable amount of time to get the proper financial information together. However, the trustee may also need time to gain proper access to bank accounts, for example, and other trust assets.

Trust beneficiaries need to read up on the terms of the trust after the Grantor passes. It is also important that all beneficiaries consult with their attorneys to decide if a Trust Accounting will be made available to them.

What is a Trust Accounting? This set of information is a way of providing a snapshot of the financial health of the trust, and by California’s Probate Code, it may include the following:

• Fundamental information about the trust’s assets
• The value of the trust’s assets
• An explanation of who the other beneficiaries are
• A list of the trust’s expenses
• The amount of each beneficiary’s asset share
• The terms of the trust

Sometimes, a beneficiary requests access to certain financial information, and the trustee denies access. If this occurs, the beneficiary should speak with an experienced trust lawyer about the best action.

• The Right to Equitable Treatment by the Trustee

Often, there exist multiple beneficiaries. When this happens, some trustees tend to favor one or more beneficiaries over others.

If the trustee displays preferential treatment to one or more beneficiaries, the wronged beneficiaries have a right to pursue legal action. Trustees who are not loyal to all beneficiaries or who pick and choose based on favoritism neglect their fiduciary duties. Trustees pledge to place all of the beneficiaries ahead of their own interests, not just some of them.

When trustees do not behave fairly, their behavior can impact everything from the distribution of assets to betraying the terms of the trust. Therefore, beneficiaries should not tolerate unfair treatment by trustees, and when this type of behavior occurs, they should speak with an experienced attorney immediately.

• The Right to Pursue Lawful Remedies

Many California trustees carry out their duties flawlessly, and the beneficiaries remain content. However, as is true in all areas of life, sometimes people become corrupted or intend to harm others with their actions.

Trustees must pursue legal action when they abuse a beneficiary’s rights. What are some specific ways trustees violate the rights of beneficiaries? These may include:

• Violations of fiduciary duty
• Denial of financial information
• Self-dealing
• Stealing trust assets
• Managing trust assets poorly
• Refusing to distribute trust assets
• Misappropriating trust assets
• Distributing assets in a manner uncoordinated with the trust
• Other violations

When such offenses occur, beneficiaries should maintain careful records of the trustee’s transgressions and move quickly to contact an attorney. Beneficiaries whose rights are violated have many options, including suing trustees for breach of fiduciary duty.

An experienced trust lawyer can help beneficiaries take legal action against a negligent trustee and, if needed, return their assets to the rightful owners.