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Does the Beneficiary of an Estate Have Any Say?

The answer to whether or not the beneficiary of an estate has any say in the management of that estate depends on the document under which the beneficiary is to acquire rights in the decedent's property. The say of a beneficiary in the management of trust property will also be different before and after the death of the settler of a trust. Depending on the particular situation and the document under which the rights in property are to be acquired, the beneficiary of an estate may have a large or small amount of say in how property is managed. Many rights in property, such as those acquired by will, do not vest until the decedent actually passes away, whereas property rights acquired via an irrevocable trust vest at the time the trust is funded, which may occur long before death in some instances. The following will provide a brief overview of some of the rights a beneficiary may have.

Although the passing of a loved one is an emotionally challenging time, consultation with a trust and estate planning expert should always be the first step in determining your rights as a beneficiary. As a beneficiary, you may have a say in how estate property is managed or distributed. Consultation with an expert estate planning attorney should be accomplished as soon as is reasonably possible, but always before any property is sold or transferred. An estate planning expert can provide critical tax-saving advice and help assure the rights of beneficiaries are properly protected.

Does a Beneficiary Have a Say in Property Acquired by Will?
Upon the death of a testator, a beneficiary inherits all of the rights in inherited property as held by the decedent. A beneficiary who receives property outright from a will has the only say in how the property may be used. In general, if a beneficiary is to acquire property by will, that beneficiary has no say in the property until the testator passes away. The beneficiary does not have a vested right in the property until the testator passes because the testator is free to change his or her will at any time before death and there is no right to an inheritance except in extremely rare circumstances such as for the care of a minor child. Disinherited beneficiaries who believe a loved one changed their will because of the improper influence of another may be able to challenge their disinheritance through a will contest, but only if the disinheritance was the result of undue influence or the decedents own insanity at the time the will was changed.

Does a Beneficiary Have a Say in Property Acquired by Trust?
There are two major forms of trusts used in estate planning. The form of trust used will have an effect on the say of an estate beneficiary in the management of the trust property. A revocable living trust is commonly used in estate planning to avoid the costs and delay of probate upon the death of the settler. During the life of the settler, property is placed in the name of the trust, but the settler is free to remove property from the trust anytime before their death. Because of the revocable nature of most living trusts, the beneficiaries do not have vested rights in the property until the settler passes away and therefore a beneficiary has no say in how the property is used during the life of the settler. Upon the death of the settler, the trust becomes irrevocable and the rights of the beneficiaries vest. In the case of an irrevocable trust, the rights of the beneficiary vest upon the creation and funding of the trust. This may occur long before the death of the settler, but these trusts are less commonly used, because the settler loses his or her ability to dispose of the property during their life. In either case, the beneficiary of an irrevocable trust may have a say in the management of the trust property.

The trust instrument itself often controls the say of a beneficiary in the management of trust property, but all beneficiaries have some rights under state trust laws. Although the beneficiary of a trust may request that the trustee manage property in a certain way, trustees have a fiduciary duty to preserve the trust as instructed by the settler. Mismanagement of trust funds, even at the request of a beneficiary may be considered a breach of fiduciary duty and subject a trustee to liability, especially in the case of multiple beneficiaries. There are certain rights guaranteed to trust beneficiaries under state law:
  • The right to be informed of the existence of a trust and your beneficial rights under that trust upon it becoming irrevocable.
  • The rights to be informed of the property composing the trust and to inspect the trust instrument upon it becoming irrevocable.
  • The right to a periodic accounting of trust assets. Most states required at least a bi-annual accounting.
Tucker Cheadle has acted as a fiduciary, trustee, executor, and administrator on more than 70 trusts and wills. Cheadle Law continues working with clients year over year because of the skill and expert handling of all trust matters including tax returns, administrating rights for beneficiaries, and overall management of the clients trust.

With over 30 years experience, Tucker Cheadle and his team of accountants and paralegals will help protect your rights as an estate trust beneficiary. Call Tucker Cheadle at 949.553.1066. He will go over your options, and help you get clarity to make wise future decisions about your estate trust.

A review of any materials on this web page, any preliminary comments or an introductory meeting does not constitute legal, income tax or accounting advice upon which reliance can be placed. The attorney client relationship can only be created by a written retainer agreement following a check of potential and actual conflicts of interest with other clients.
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