The Beneficiaries to the Trust – Where Do Their Rights Start and End?
March 3rd, 2010 Filed under: ab trust,Executor Fees,sample wills,Trusts attorney — Estate Planning Author
You worked hard in order to get what you want. You spent time and effort in order to have the properties that you have acquired over the years. The next best thing to do is to set up a trust and make the important people such as your children, your siblings, and other loved ones as your beneficiaries. But there are issues that can be difficult to handle especially when the beneficiaries want to have access to the assets in the trust. This leads us to the question: where do the beneficiaries’ rights start and end?
In the past, there are two types of beneficiaries: the discretionary and the fixed beneficiaries. The fixed beneficiaries are basically entitled to the Trust’s assets. In line with this right, they have the power to see all documents concerning the Trust including the simple agreements, revision policies, and the financial documents.
Discretionary trustees, on the other hand, have an entitlement that can be considered by the Trustees if they are handling out cash, assets or capitals. Therefore, it follows that this type of beneficiaries has no right to see for themselves the documents that involves the Trusts.
The days when what a beneficiary sees in the Trust is based whether they are discretionary or fixed is long gone. Today, the courts decide what a beneficiary is entitled to see in the Trusts. As a beneficiary, one has the right to approach the courts to seek disclosure of the deed of the trust. Thus, it is dependent on the court to entitle a beneficiary access to these deeds. Some of these deeds that a beneficiary can have access to include resettlement deed and change of trustee’s deeds. They can also check out the trust valuations and other financial document related to the trust.
As a conclusion, one can easily assume that beneficiaries of the trusts have the right to know the condition of the trust. It does not matter what type of beneficiary you are as limits as to what a beneficiary can see is not determined by type but rather by the courts. Good communication plays a very important role in the success of the trust. The best way to become a responsible beneficiary is to carefully track all the activities in relation with the trust.
John Rowe is working with Gilligan Rowe & Associates. They are Chartered Accountants and are Specialist Accountants and Experts in property and family trusts.
