Living trust beneficiaries are those who receive the principal or funds from a trust. An appointed trustee acts to distribute trust funds to beneficiaries under the terms set forth by the grantor -- the person who created the trust. The trust agreement may hold variable stipulations that define trust beneficiary rights with certain limitations provided in state laws. Basic rights for beneficiaries govern the actions of the trustee after the grantor has relinquished power as the trustor.
The Right to Be Informed
Current and future beneficiaries of a living trust have the right to be informed of the existence of the trust and the assets contained within once the trust becomes irrevocable and management of the trust is handed down to the appointed trustee. This usually happens upon the death of the trust grantor. The trustee is also responsible for informing the beneficiaries on practical steps to protect and manage the income from the trust.
The Right to Receive a Copy
Beneficiaries named in a trust are given the right to examine the entire trust agreement including all assets contained and the expressed agreement from the grantor regarding how the funds will be distributed and the identity of all other beneficiaries. Ask for a copy of the trust if you are one of the beneficiaries; the trustee or another legal trust manager is legally bound to give you a copy.
The trustee is legally bound to manage the trust impartially with the sole intent of making the assets grow to perform as well as possible in the interest of the beneficiaries. As such, trust beneficiary rights include being entitled to a yearly report on the status of the trust and its disbursement from the trustee. Beneficiaries are also entitled to receive payment for damages if the trustee is found responsible for any losses within the trust assets.
Limiting Trust Beneficiary Rights
Many states have codes within the trust laws that allow a grantor to limit the rights of some or all named living trust beneficiaries. A beneficiary may be allotted a designated representative who receives reports directly from the appointed trustee in regard to the information of the trust. The representative may be directed regarding how much of the information to share with the named beneficiary assigned. The rights for beneficiaries are legally limited as such.
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