Taxation & Estate Planning

So You Say You Want To See A Trust That You?re A Beneficiary Of And An Accounting Of The Trust?

By michael

Well ok then!  If its an Ohio trust, all you have to do is ask.

Under Ohio law, the Trustee of a Trust is obligated to give a copy of the trust to the beneficiaries that ask for it.  The same goes for an accounting of the trust as well.  Ohio Revised Code Section 5808.13 reads as follows:

A) A trustee shall keep the current beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. Unless unreasonable under the circumstances, a trustee shall promptly respond to a beneficiary?s request for information related to the administration of the trust.

(B) A trustee shall do all of the following:

(1) Upon the request of a beneficiary, promptly furnish to the beneficiary a copy of the trust instrument. Unless the beneficiary expressly requests a copy of the entire trust instrument, the trustee may furnish to the beneficiary a copy of a redacted trust instrument that includes only those provisions of the trust instrument that the trustee determines are relevant to the beneficiary?s interest in the trust. If the beneficiary requests a copy of the entire trust instrument after receiving a copy of a redacted trust instrument, the trustee shall furnish a copy of the entire trust instrument to the beneficiary.

So, if you’re the beneficiary of a trust or you even think you may be the beneficiary of a trust, all you’ve got to do is ask!

If your the Trustee of a trust and you receive one of these requests, you likely have to comply.  And typically – at least in my experience – all the requesting beneficiary wants is a little information.  In these situations sunlight really is the best disinfectant so unless you’ve got something to hide then responding timely is almost always advisable.

What is an accounting?  Well its not simply a listing of the assets owned by the trust – though that’s a nice start.  NO, an accounting should show all cash and property transactions during the accounting period, including compensation paid to the trustee and the trustee’s agents, gains and losses realized during the accounting period and all receipts and disbursements should be evident as well.  Finally, the account should identify and value the trust assets on hand at the close of the accounting period and for each asset or class of assets that are reasonably capable of being valued the accounting should contain two values, the asset acquisition value and the estimated current value.  This is the only way for beneficiaries to be kept reasonable informed about what’s going on with the trust.

I’ve had this issue come up a lot in the last two months and I am actually litigating 3 different matters right now all because a Trustee didn’t want to make the required disclosures.  So, beneficiaries, if you’re having a problem getting information from your Trustee just tell them they have to respond to your request.  If you’re a Trustee, either respond or risk getting removed as Trustee.  (If the latter happens, keep in mind, that usually all of my attorney’s fees incurred in removing you will come out of the trust thus reducing its value for all beneficiaries.  I’ll also usually take a long hard look at any compensation you’ve taken before your removal…  So think about that when contemplating not responding to a beneficiary’s request.)

If your the beneficiary of a trust or the Trustee, give me a call and we’ll talk about the best next step to protecting your interest and the trust.

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Full post as published by The Ohio Trust & Estate Blog on July 08, 2010 (boomark / email).