If you are the beneficiary of a trust, your reliance is placed on the Trustee to manage the trust, maintain open communication regarding trust matters, and distribute assets to you according to the trust agreementâs provisions faithfully and responsibly. While most Trustees fulfill their fiduciary duties with integrity and without complications, situations may arise that lead a beneficiary to question the Trustee’s intentions or competence in managing the trust effectively. If you find yourself in this position, it is essential to have a clear understanding of your rights. Toward that end, the Essex Junction attorneys at Unsworth LaPlante, PLLC explain your rights as the beneficiary of a Vermont trust.
Trust Fundamentals
A trust constitutes a legal arrangement in which one party holds property for the benefit of another. The individual establishing the trust is commonly referred to as the “Settlor,” “Trustor,” or “Grantor.” The Settlor transfers property to a Trustee, appointed by the Settlor, who is responsible for safeguarding the property on behalf of the trust beneficiaries. The Trustee is also responsible for managing trust assets and administering the trust terms in accordance with the Settlor’s wishes as stated in the trust agreement.
Vermont Trust Beneficiary Rights
As a named beneficiary in a trust agreement, you have a legal interest in the trust assets from the moment the trust is established and funded, without regard to whether you are currently entitled to distributions from the trust. Along with having an ownership interest (which is not the same as owning the assets outright) in the trust assets, you also have a number of important rights conferred upon you by the law. The trust agreement itself may also bestow additional rights upon the beneficiaries above and beyond those that the law recognizes. A common example is the right to remove or replace the Trustee. Some Settlors choose to specifically grant that right to the trust beneficiaries. In the State of Vermont, Title 14A, Chapter 8 sets forth the duties of a Trustee and the many of the right of trust beneficiaries, including the right to:
- Receive scheduled distributions. If you are a current beneficiary, you are entitled to receive any scheduled distributions as outlined in the trust agreement. If you are a future beneficiary, you have the right to be considered when decisions affecting your future distributions are made.
- Request an accounting. An accounting lays out, in detail, trust business to date, including bills paid and distributions made as well as contributions to the trust principal and income earned off investments. You have the right to obtain a comprehensive accounting report upon request. This right is particularly significant if you have concerns about the Trustee’s administration of the trust.
- Stay informed about trust operations. You have the right to stay informed about trust operations and maintain a line of communication with the Trustee overseeing the trust. As soon as the Trustee begins the administration of the trust you should be informed, and you should be updated on trust business on a regular basis thereafter.
- Petition a court to remove a Trustee or terminate the trust. Â If the trust agreement grants you the authority to remove or replace the Trustee, you do not need a court to exercise that power. If, however, the trust agreement does not explicitly give you that authority, you still have the right to petition a court for the removal of the Trustee and/or for the termination of the trust. In that case, you will need to convince a court that removing the Trustee or terminating the trust is what is best for you and for any additional beneficiaries.
Do You Have Additional Questions about Your Rights as a Vermont Trust Beneficiary?
For more information, please attend one of our upcoming FREE webinars. If you still have questions about your rights as a Vermont trust beneficiary, contact an experienced Essex Junction trust attorney at Unsworth LaPlante, PLLC by calling 802-879-7133 to schedule your appointment today.
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