Beneficiaries for a Revocable Trust or Irrevocable Trust
If you are a trust beneficiary, you may be wondering whether you have specific rights when it comes to the trust. Depending on the type of trust, you may be entitled to income from the trust either now or at some point in the future. Understanding your rights is important.
What Is a Trust?
Trusts are something of a mystery to many people, but they are actually fairly straightforward legal documents. In a trust, an individual makes the trust by naming another person or entity (called the “trustee”) to oversee the trust assets. The trust beneficiary’s rights depend on the type of trust created – revocable or irrevocable trust.
In a revocable trust, the trust maker has the ability to change or end the trust at any time. The trust maker can even change the beneficiaries.
In an irrevocable trust, the trust can’t be modified except in very specific and rare circumstances, and only then by an order from the court. In many cases, a trust remains revocable as long as the trust maker is living and then becomes irrevocable when the trust maker passes away.
Beneficiary’s Rights in an Irrevocable Trust
The beneficiary of an irrevocable trust has specific rights that vary depending on whether the beneficiary is entitled to benefits now (a “current beneficiary”) or upon some future event (a “contingent beneficiary”). For example, a father may create a trust that leaves income to the mother upon his death and then the remainder of the trust income to their children upon her death. In this scenario, the mother is the current beneficiary and the children are the contingent beneficiaries.
In an irrevocable trust, the trust beneficiaries generally have the following rights:
Income. If you are a current beneficiary, you have a right to distributions per the terms of the trust document.
Communication. The trustee has a duty to provide information about the trust.
Accounting. Trust beneficiaries have a right to know the income, expenses, and distributions of the trust. Although many trusts require the trustee to make a yearly accounting, the specific regularity of the accounting usually depends on the terms of the trust.
Removal of the Trustee. If a trustee is not performing his or her duties, the beneficiary has a right to ask the court to remove the trustee.
Terminate the Trust. Beneficiaries also have the right to ask the court to end the trust under certain circumstances.
Springfield, Missouri Estate Planning Law Firm
If you are a trust beneficiary, we can help you understand and safeguard your rights. At the Law Office of Randy L. Smith, LLC, we help people create estate planning documents that provide peace of mind. Call today at (417) 841-2775 to speak to an experienced estate planning lawyer about your case.