Does trustee have to contact and pay out to beneficiaries?

UPDATED: Oct 1, 2022

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Does trustee have to contact and pay out to beneficiaries?

My stepsister died 2 years ago leaving a Trust for her 2 daughters that another step-sister is in charge of. She also left $10,000 each to her 11 nieces and nephews and $20,000 to her father. The problem that the sister who is in charge won’t let anyone know how much is the the daughters’ trusts, not even the girls. She paid out the $20,000 to her father but none of the nieces and nephews have gotten anything, except maybe her 2 kids. This sister lives in CA. Also, right after our sister died, this other sister lost her job but somehow decided to do a 90k remodel of her home. Since she won’t let anyone have any info or if she does give it to the daughters but not very freely, no one knows what’s going on and what our recourse might be? One of my nieces my passed sisters is wanting to plan for college but doesn’t know what she can afford because of refusal to open the books as they say. This is extremely upsetting because I know my passed sister wanted to help all of her nieces and nephews education and all most all of them are in college or almost there. My 2 nieces can’t plan any type of future because of lack of info.

Asked on January 12, 2019 under Estate Planning, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

A trustee has three legal obligations. The first is to follow the plain terms of or instructions for the trust. The second is called her "fiduciary duty," and is the law-imposed duty to act in the interests of the beneficiaries and with loyalty to them; to not engage in "self dealing," or benefitting herself at the expense of the beneficiaries; and to use reasonable care and prudunce (like an ordinary person would use in managing her own asserts) in how she fulfills her duties as trustee. The third is the obligation everyone has--to not break the law and not steal, and to take trust money which not supposed to go to her would be theft (from the trust).
The trustee may be violating all three of these obligations: she is not being loyal to her beneficiares and won't even communicate fully with them; is not distributing money to them as you imply the trust indicates she should; may be benefiting herself and her family at other's expenses; and may be stealing from the trust. Your neices and/or nephews can bring a type of legal action known as an action for an "accounting" (that's the traditional name; it's possible your state has a different name for it) in which you ask the court to examine how the trustee has been acting (make her "account" for her actions as trustee). The court can order her to do or not do certain things; to repay monies she took from the trust; and can replace her as trustee.
This can be a difficult actionf for a non-lawyer to bring: it is advised that any beneficiaries interested in looking into this jointly (so as to spread or share the cost) consult with a trusts and estates attorney.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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