A Last Will and Testament typically serves as the foundation for any comprehensive estate plan; however, additional tools and strategies are what make the plan “comprehensive.” Trusts have risen to the top of the list, in recent decades, of common estate plan components. If you are a beneficiary of a trust agreement for the first time you undoubtedly have a number of questions related to how the trust works. You may also want to know the answer to the question “What rights does a trust beneficiary have?
The type and extent of the rights you will have as a beneficiary of a trust will depend, to a large extent, on the type of trust involved. Trusts are broadly divided into revocable and irrevocable trusts with the former being able to be modified or terminated by the Maker of the trust at any time and the later not being able to be modified or terminated at any time. As a beneficiary of a revocable trust you have less rights by virtue of the simple fact that you could be removed as a beneficiary entirely at any time. Nevertheless, while you are a beneficiary you have the right receive disbursements pursuant to the terms of the trust as well as the right to communicate with the Trustee about trust business.
If you are the beneficiary of an irrevocable trust, you likely have considerably more in the way of rights, including:
- Communications – you have a right to regular communication from the Trustee and the right to request information from the Trustee if needed.
- Disbursements – you have the right to disbursements from the trust fund as provided for in the trust terms.
- Accounting – an accounting should be prepared and provided to you at regular intervals – usually every year.
- Remove Trustee – as a beneficiary you have the right to petition a court to remove the Trustee is you believe the Trustee is not doing his/her job properly. Sometimes the power to remove Trustee is even explicitly written in the trust agreement.
- Terminate trust – under certain conditions, even an irrevocable trust can be terminated; however, only a court can formally terminate the trust. As a beneficiary you have the right to petition the court for termination.
Another factor that will impact your rights as a beneficiary of a trust is whether or not you are a present or future beneficiary, with the former having more rights than the later as a general rule.
If you have additional questions or concerns about your rights as a trust beneficiary, or your Illinois estate plan in general, contact the experienced Illinois estate planning attorneys at Nash Bean Ford & Brown, LLP by calling 309-944-2188 to schedule your appointment today.