A trustee needs to communicate with beneficiaries about crucial matters, as required by law. Therefore, if the trustee of a trust for which you're a beneficiary fails to keep you reasonably informed, you can take legal action against them.
The Timeline for Challenging a California Trust
Once a beneficiary or heir receives this notice, they have only 120 days to contest the trust. If they wait more than 120 days, their challenge will be dismissed without consideration, and they will be forever barred from attempting another contest.
How Often Does an Executor Have to Show Accounting to Beneficiaries? As an executor, you must provide a formal accounting at least once a year, but beneficiaries can request an informal probate accounting in California at any time. When they do, you must produce it.
You should arrive fully briefed on the agenda and prepared to discuss each item. Boards should meet often enough to maintain effective oversight and control. In most cases this will be at least quarterly.
Georgia colonists complained the most, however, about three of the trustees' regulations: (1) restrictions on land ownership and inheritance, (2) a ban on slavery, and (3) prohibitions on rum and other hard liquors.
An owner is permitted to attend a Trustees meeting – they can speak but do not have a vote at that meeting.
Q: Can an Executor Withhold Money From a Beneficiary in California? A: Executors do not have the authority to act outside the guidelines stipulated in the will. An executor cannot withhold money from a beneficiary unless they are directed to do so through a will or another court-enforceable document.
If an executor is ignoring you, they are in violation of their fiduciary duties. You should hire a qualified lawyer as soon as possible to try and turn the situation around. Something else beneficiaries can do to avoid being ignored by the executor is to play an active role in administration.
Beneficiary Rights and Accounting
According to California Probate Code section 10950, if more than a year has passed since the beginning of probate administration and an accounting has not been filed, interested parties are entitled to file a petition with the court to make the executor to complete an accounting.
As previously mentioned, trustees generally cannot withhold money from a beneficiary for no reason or indefinitely. Similarly, trustees cannot withdraw money from a trust to benefit themselves, even if the trustee is also a beneficiary.
What Is 5 by 5 Power? A 5 by 5 power clause in a trust document gives the beneficiary the right to withdraw either $5,000 or 5% of the fair market value of the trust account per year, whichever is greater. This is in addition to the regular income payout benefit of the trust.
At the end of the payment term, the remainder of the trust passes to 1 or more qualified U.S. charitable organizations. The remainder donated to charity must be at least 10% of the initial net fair market value of all property placed in the trust.
A trustee may withhold money or assets from a beneficiary if they must focus on other responsibilities surrounding the estate. For example, if the estate becomes subject to a tax audit or litigation arises, a trustee may refuse to give beneficiaries their share of the assets until these issues are resolved.
The trustees must look after the trust property carefully for the benefit of the beneficiaries. In doing so, the trustees must act unanimously (if there's more than one) and always act in the best interests of the beneficiaries and not benefit themselves. We've set out the duties of trustees in more detail here.
If you have tried to communicate with the trustee alone or through attorneys and have still not received a satisfactory response, the next step may be to file a petition with your local court. Before taking this step, consult with an attorney with experience in trust administration.
An executor should be brought to court if they are not doing their job. If they are not settling the deceased's estate and moving the process along, someone else should take over. An executor can also be brought to court if they do not communicate with the beneficiaries.
Dealing with a problem beneficiary
California executors can overrule beneficiary wishes based on the decedent's will or court orders, and align actions with legal requirements. Before making such decisions, it's wise to consult a probate attorney in order to comply with regulations and avoid potential disputes.
If you are the designated beneficiary on a deceased person's bank account, you typically can go to the bank immediately following their death to claim the asset. In general, there is no waiting period for beneficiaries to access the money; however, keep in mind that laws can vary by state and by bank.
Executors are bound to the terms of the will, which means they are not permitted to change beneficiaries. The beneficiaries who were named by the decedent will remain beneficiaries so long as the portions of the will in which they appear are not invalidated through a successful will contest.
The timeline is much shorter. California laws, for example, require that beneficiaries are notified within 60 days of the death. After you are notified, you typically must play another waiting game.
An executor of a will cannot take everything unless they are the will's sole beneficiary. An executor is a fiduciary to the estate beneficiaries, not necessarily a beneficiary. Serving as an executor only entitles someone to receive an executor fee.
Serving as the trustee of a trust instills a person with significant power. They have access to all the trust assets, but with a catch: They can only use those assets to carry out the instructions of the trust.
Being nominated as a Successor Trustee is not a binding contract. It's an invitation and request to step into an important role, but only if you choose to accept it. Even if you are named as a Successor Trustee without your knowledge, you can always refuse the role after the fact.