- September 21, 2022
- Posted by: Michael Gunning
- Category: Wills & Trusts
Today we want to address a more common situation than people might think. We’re talking about the worst nightmare of any beneficiary today: dealing with a trustee who refuses to do the right thing – the trustee is not paying beneficiaries.
This might be a trustee who doesn’t want to pay out the trust fund or one who is making inaccurate and delayed distributions of trust assets. Whatever the case may be, beneficiaries need to know their rights in this situation.
The first step is to understand that you have certain legal rights as a beneficiary. These include the right to:
- Information: You are entitled to information about the trust, its assets, and how the trustee manages it.
- Accounts: You have the right to request and receive accountings from the trustee detailing all income and expenditures made on behalf of the trust. You should never have to encounter the situation where a trustee refuses to give accounting to a beneficiary.
- Distributions: You are entitled to distributions from the trust according to the terms set forth by the settlor.
The best course of action for your unique circumstances will vary depending on your situation, so you should ideally speak with an experienced attorney about your options. Trusts can be complicated, and you want to ensure you take the proper steps to protect your interests.
A Trustee is Not Paying Beneficiaries – Can that happen?
A trustee may refuse to pay a beneficiary only if the trust terms allow them to do so. However, if this happens, you can also pursue a breach of fiduciary duty lawsuit, requesting that the trustee make the requested distribution or petitioning the court to remove the trustee.
Can a trustee refuse to give an accounting of their actions to a beneficiary?
Whether or not you, as the beneficiary, can access trust funds generally boils down to the terms set forth by the trust. If you are entitled to receive money from a trust, the trustee is legally bound to follow its confines and give you your share of assets, specifically if we’re talking about a distribution outright.
If your trust’s terms specify that you are supposed to receive a gift outright, then the trustee is obligated to give you that money – and they cannot hold on to it indefinitely. A trustee cannot refuse to provide accounting information or financial records, and they are required by law to communicate with beneficiaries.
Many beneficiaries have to deal with these terrible situations regularly. It’s more common than one might think. We hear from people always looking for help because they’re in the middle of their own nightmare scenario. At that point, you’ll likely need to go to court and fight for your rights. But, there is something you can do.
How long does a trustee have to distribute assets?
This is highly dependent on the terms of the trust again (as are most of the factors pertaining to wills & trusts in general).
Regardless of your circumstances, you can nearly guarantee that a judge won’t let a trustee get away with violating any trust terms – particularly if it’s harming you or other beneficiaries. So when a trustee is not paying beneficiaries, they are clearly refusing to honor the terms of the trust and that should cause a judge to take action.
Put a Stop to Conflicts of Interest Immediately
You can stop your own beneficiary horror story by filing a petition in court and requesting that a judge orders the trustee to do the right thing and pay what is owed. That is what will happen in your situation. The beneficiary’s right to a fair trial is the right of the beneficiary. If you don’t hear back from the trustee, your case will be over.
If you find a trustee is not paying beneficiaries and they are not responding to your case, you can request the judge to order them to take appropriate action. The judge may hold them in contempt if they still don’t comply after appearing in court.
When should I contact a trust litigation attorney?
If you’re experiencing difficulties and a trustee is not paying beneficiaries or if you’re unsure about distribution of trust assets to beneficiaries (or the distribution of irrevocable trust assets to beneficiaries), or even irrevocable trust disbursements, the best route is to seek professional help from a Will & Trust attorney like Moulton Law Offices. A reliable trust attorney will review your case and offer sound advice on what to do next. In some instances, filing a petition for instructions with the court may be all that’s needed.
Thank you for visiting our website today! We now have offices in multiple cities throughout Eastern Washington. Call our office at 509-328-2150 to get started, or visit our contact page to schedule an appointment through email. We would happily assess your situation and determine if we can help you resolve your trustee difficulties. Learn more about the powers of a trustee from the Washington State legislature text.