A trust account without a named beneficiary is actually a common occurrence. This situation usually occurs when the named beneficiaries die without heirs, and the trust agreement does not take this into account. When this situation occurs, the disposition of the trust is determined by court order.
Trustee
When a trust has no known beneficiaries, a person with legal standing to bring a lawsuit will file a petition with the court to determine what happens to the trust. If there are no named beneficiaries, then the duly acting trustee is the only interested party with legal standing to petition the court. Distant relations not named in the trust are not interested parties to the trust, and do not have legal standing to file a lawsuit.
A trust account without a named beneficiary is actually a common occurrence. This situation usually occurs when the named beneficiaries die without heirs, and the trust agreement does not take this into account. When this situation occurs, the disposition of the trust is determined by court order.
Court
If the previous trust beneficiaries were individuals, the trustee will make every reasonable effort to reconstruct the family tree and to locate any relatives prior to petitioning the court for instruction. Notice of the court action is sent to any permissible beneficiary, who has the right to retain a lawyer and appear in court. Unless there are compelling reasons not to, judges in most states will usually follow the state family lineage laws that are in place for a person who died without a will.
A trust account without a named beneficiary is actually a common occurrence. This situation usually occurs when the named beneficiaries die without heirs, and the trust agreement does not take this into account. When this situation occurs, the disposition of the trust is determined by court order.
Charity
If the trust beneficiary was a charity that no longer exists, then the trustee will petition the court to appoint a new charity under the cy pres doctrine. Cy pres is an abbreviated form of French that means "as near as possible" used in our legal system. The court will use its judgment to appoint a charity "as near as possible" to the intent of the grantor. Family members who were not previously trust beneficiaries will still not benefit, since the judge will continue the trust for charity as was the grantor's original intent.
A trust account without a named beneficiary is actually a common occurrence. This situation usually occurs when the named beneficiaries die without heirs, and the trust agreement does not take this into account. When this situation occurs, the disposition of the trust is determined by court order.
First Step
The first step regarding a trust without beneficiaries is to talk to the trustee. Any person who believes he has an interest in the trust can retain a lawyer to represent his interests. Trusts without beneficiaries are complicated legal proceedings, and it is always a good idea to hire a lawyer.
References
- The Free Dictionary: Cy Pres
- The Free Dictionary: Trust
- The Free Dictionary: Beneficiary
- Virginia Bar Association. "Guide to the Administration of Decedents' Estates in Virginia," Accessed Nov. 7, 2019.
- North Carolina Judicial Branch. "Estates," Accessed Nov. 7, 2019.
- North Carolina Legal Assistance for Military Personnel. "Setting the Record Straight on Living Trusts," Accessed Nov. 7, 2019.
- Consumer Financial Protection Bureau. "What is a Revocable Living Trust?" Accessed Nov. 7, 2019.
- Consumer Financial Protection Bureau. "Help for Trustees Under a Revocable Living Trust," Accessed Nov. 7, 2019.
- Superior Court of California County of Santa Clara. "Probate Trusts," Accessed Nov. 7, 2019.
- Office of the Probate Court Administrator State of Connecticut. "Probate Court Unser Guide: Understanding Trusts," Accessed Nov. 7, 2019.
- Arizona State Legislature. "14-1201. Definitions," Accessed Nov. 10, 2019.
- Alaska Court System. "Trusts," Accessed Nov. 7, 2019.
- Pennsylvania Department of Revenue. "Estates, Trusts and Decedents," Accessed Nov. 10, 2019.
- Estates and Trusts Section Council of the Maryland State Bar Association and the Register of Wills Association of Maryland. "Living Trusts," Accessed Nov. 7, 2019.
Writer Bio
Mary Frazier began writing in 2011 for various websites and has over 20 years of experience as a bank vice president and senior trust officer. Frazier is a Certified Trust and Financial Advisor, holds a Bachelor of Arts in economics from the University of North Florida and holds a Master of Science in finance from the College for Financial Planning.