Executive summary
- Beneficiaries of both wills and trusts have unique legal rights throughout the estate or trust administration process.
- Rights of will and trust beneficiaries include the right to information, the right to an accounting of estate transactions, and more.
- Beneficiaries also have the right to challenge trustees if they feel that they are acting irresponsibly or against the terms of the trust instrument.
- A trust or estate administration attorney can help beneficiaries understand their rights and navigate the challenges involved in exercising these rights through the legal system.
Glossary
Will – A legal document created by an individual to identify beneficiaries of an estate’s assets and appoint a third party to distribute the assets of an estate.
Trust – A legal agreement that grants a third party or fiduciary the authority to hold and manage assets for the beneficiaries of a trust estate.
Probate – The process in which the court validates a will and empowers the appointed executor to distribute the assets from the estate in line with the terms of the will.
Interested parties – Any party that has an interest in the assets surrounding an estate, which can include trustees, executors, estate administrators, creditors, and beneficiaries.
Introduction
Beneficiaries of a will or trust have unique rights and legal protections in the trust and estate administration process. Regardless of whether you are a beneficiary of a will or a trust, you have a right to assets of that estate or trust and the right to transparency surrounding the management of that estate and its assets. Under this umbrella, a beneficiary has several other rights they can exercise to ensure the estate administration process happens smoothly and within the confines of the law.
If you are the beneficiary named in a will or a trust in California or Texas, you have several rights and responsibilities you should consider as you move through the process of settling an estate.
Both California and Texas have similar established rights for beneficiaries. These rights allow them full transparency surrounding information and transactions around an estate, the right to raise a contest if they have concerns about the process, and the right to seek trustee removal. Rights of beneficiaries in California are covered under the California Probate Code. In Texas, estate beneficiary rights are covered under the Texas Trust Code and Texas Property Codes.
At RMO, we have decades of experience in supporting beneficiaries in understanding and exercising their rights. This guide outlines the rights of will or trust beneficiaries in California and Texas so that you understand them and can receive the best possible outcome out of the trust or probate administration process.
Overall, rights of the beneficiaries include, but are not limited to:
- The right to receive a copy of the will/trust document.
- The right to receive timely distributions according to the terms of the trust/will.
- The right to receive and challenge accountings.
- The right to be kept reasonably informed concerning the administration of the trust.
- The right to impartial treatment by the executor/trustee.
- The right to petition the court to have the executor/trustee suspended or removed.
Understanding Your Rights as a Beneficiary
Not all wills and trusts are the same. And not all beneficiaries are entitled to the same rights within a particular will or trust. It is imperative that you understand what your specific rights are, when you will be eligible for a distribution, and what other caveats may be in place that may impact your situation.
A key step to understanding your will or trust beneficiary rights is to understand and carefully review the terms of the will or trust document. It’s crucial to read through the document as each one can lay out different terms. Many documents will outline the specific terms for certain rights for beneficiaries. For example, documents will outline terms for trustee removal, asset distribution, and distribution timelines, which are all crucial details for trustees and beneficiaries to understand.
If you have any trouble interpreting the documents or have any questions around your estate beneficiary rights, then you should contact a probate or trust administration attorney. An attorney can help you interpret and understand the terms of the will or trust document and will help you determine how they influence your rights as a beneficiary.
Specific beneficiary rights in trust and probate administration
Beneficiaries have several rights in the trust and probate administration process, ensuring they can protect their interests and secure their rightful inheritance. The following are some of the key rights available to beneficiaries in the trust and probate administration process.
The right to information
As a beneficiary, you have a right to any and all information regarding the will or trust and all parts of the process required to administer the estate’s assets. At the very beginning of the trust or estate administration process, you should receive a copy of the will or trust document. Beneficiaries should review the will or trust document to ensure they understand the terms of distribution, what responsibilities a trustee or executor has, and what the creator intended for the assets they left behind.
Beneficiaries should also have full transparency regarding transactions or actions surrounding the trust. Trustees and executors should communicate significant decisions like property sales or other transactions.
If you have questions, don’t hesitate to ask the executor. Make sure to do so in writing so that your request is documented. Having these requests in writing will ensure that you have legal protection and can hold the trustee or executor accountable by providing evidence of your request. If there is any resistance to these requests, beneficiaries can challenge a trustee or executor through the court and request that they provide any applicable documents.
The right to request an accounting of estate transactions
As part of the information that you have a right to as a beneficiary, you are entitled to an accounting of the estate’s assets. This allows you to get an overview of the estate’s sold assets, remaining assets, and more. This overview will give you a permanent record you may need to access at a later date.
Trustees, executors, or personal representatives are legally obligated to maintain a detailed accounting of all transactions related to the estate. They should provide an accounting to the court at least annually and as necessary. This can include investments made, decisions made surrounding the sale of property, and more. As the administrator of the estate, the trustee, executor or other personal representative of the estate has an obligation to provide this information to beneficiaries through regular accounts.
An accounting of estate transactions should include:
- An itemized list of the estate’s assets
- Any funds or property received by the estate
- All distributions made to beneficiaries
- Bank account statements
- Receipts
- Invoices
- Tax returns
- Copies of checks
- Investment transactions
In California, California Probate Code §16063 specifies that an accounting should include a statement of all receipts, the trustee’s compensation, and compensation paid to any individuals hired by the trustee. Probate Code §1061 also specifies that the trustee or executor must include a summary of property on hand at the beginning and end of the process, gains and losses on any sales or business operations, and the value of any assets or income received.
In Texas, estate accounting is covered under Texas Estates Code §404.001. This chapter specifies that an executor must give an initial accounting of estate assets to interested parties and that any person interested in an estate can demand periodic accounting. In both states, beneficiaries have a right to request an accounting as they see fit.
The right to challenge a trustee or executor
Beneficiaries have the right to challenge a trustee or executor if they feel their actions are interfering with the distribution of assets, compromising a beneficiary’s right to an inheritance, or failing to uphold a trust or will creator’s wishes. Beneficiaries can challenge a trustee through the court if they feel that a trustee is failing to uphold their duties.
For example, beneficiaries may choose to challenge a trustee or executor in the following circumstances:
- The representative does not provide requested information about the estate or estate’s assets
- Beneficiaries believe that a representative has committed acts of misconduct
- Beneficiaries believe that a representative lacks mental capacity or is unfit to serve
- Beneficiaries feel that actions of the trustee do not reflect the interests of the trust document
Depending on the circumstances, beneficiaries can negotiate with a trustee or request more information before carrying out a formal challenge. However, if the trustee or executor refuses to cooperate, then a challenge may be necessary. In acts of gross misconduct by a trustee or executor, then you also have the right to pursue trustee removal through a challenge of their actions.
Keep in mind, you may need to retain an attorney to help you understand your legal options, protect your interests, or enforce your beneficiary rights. Do not be timid, it could cost you dearly down the road
The right to pursue probate and trust litigation
You have the right to pursue litigation if necessary to secure your right to an inheritance or protect the rights of an estate document creator. This is common in situations where a beneficiary has a disagreement with other beneficiaries or an estate representative.
Of course, the goal is often to resolve conflicts and disputes through negotiation or mediation practices. However, if you are unable to come to agreeable terms with the other side, litigation may be your last resort.
It is important to note that under California Probate Code §16000, trustees must administer the trust according to the terms of the trust instrument. This means that if a beneficiary disagrees with the distribution schedule or any other terms outlined in the trust, the trustee must disregard the beneficiary’s wishes and carry out the trust’s written requirements.
Some situations where you may pursue litigation as a beneficiary include:
- Concerns over trustee or executor mismanagement of estate assets
- Disputes over beneficiary asset distribution amounts
- Awareness of acts of misconduct where a representative’s actions have lost the trust or estate money
- Concerns over the validity of a will or trust
Please note that only people who are considered “interested persons” can contest a trust or a will. An interested party is defined by state law, but is generally anyone who has a financial interest in the estate. The California Probate Code § 48 defines an “interested person” as “an heir, devisee, child, spouse, creditor, beneficiary, and any other person having a property right in or claim against a trust estate or the estate of a decedent which may be affected by the proceeding.” Generally, this limits interested parties to heirs-at-law, whether named or unnamed in the trust/will, beneficiaries of previous wills who were excluded from the current will, or others with a financial interest in the estate.
A skilled trust and estate administration attorney can help you understand your rights and legal options, while helping you determine if litigation is an appropriate next step. An attorney may also be able to help you avoid litigation altogether through negotiation or mediation. However, if litigation is your best option, your attorney will work with you to gather evidence for your case and represent you in court in pursuit of the best possible outcome.
Trustee and executor rights and responsibilities.
Trustees and executors have a fiduciary responsibility to act in accordance with the wishes of the decedent and in the best interests of the estate. Many times, the estate grants them a certain amount of leeway in order to fulfill this responsibility, but at other times they must adhere strictly to a certain set of criteria.
Trustees and executors have the right to hold estate property, make investment decisions with estate assets, the power to pay taxes and fees for protecting the estate with estate assets, and more. They are able to exercise significant power in serving the estate as long as they uphold their fiduciary duty and act in the best estate’s interests in the process.
Understanding the rights and responsibilities of a trustee or executor may prevent beneficiaries from raising unwarranted concerns. For example, if a trustee takes a seemingly long time to distribute assets, they are protected under the law as long as the delay is justified and the trustee is fulfilling their duties to the best of their ability.
However, if a trustee or executor breaches their fiduciary duty by mismanaging estate assets or acting negligently in managing the estate, then beneficiaries have the right to pursue legal action.
To ensure you are both on the same page, communicate as often as is necessary to ensure a smooth estate transfer process. You can maintain communication with your trustee through emails, periodic check-in meetings, and reviewing documents supplied by the trustee.
Understand rights of beneficiaries in the digital age
With the rise of technology in recent years, it’s important that beneficiaries understand they also have rights regarding digital assets, such as online bank accounts and cryptocurrency. Digital assets including online accounts and cryptocurrencies, are subject to the same probate process as traditional assets like property or financial accounts. Beneficiaries should be able to access information about online accounts and cryptocurrencies upon the passing of a decedent.
Consider the following factors:
- It is the trustee or executor’s responsibility to account for these digital assets as a part of the trust or estate accounting. The will or trust creator should leave information, such as login information or private keys for digital assets or cryptocurrency in their estate planning documents and identify how they want them to be distributed.
- If beneficiaries know these assets exist, either by reviewing the will or by prior knowledge, and have not received information about them, then they can request information from the administrator or initiate a challenge in court if they do not receive the information.
- If a decedent left behind assets in digital currency, then it’s important for beneficiaries to understand their rights around these digital assets. For example, if a decedent left behind assets in cryptocurrency and identified beneficiaries to receive them in the will, beneficiaries have the right to information about these assets and should receive them upon the distribution of all other assets.
When the trustee or executor distributes assets, the private keys and login information for the accounts or digital wallets should be transferred over to beneficiaries as outlined by the will or trust document.
Understand and leverage your rights as a beneficiary
Beneficiaries have unique rights and protections when navigating the trust or estate administration process. If you’re a beneficiary of an estate or trust, then it’s crucial that you understand your rights so you can secure your rightful access to your inheritance. The support of a skilled attorney can be incredibly valuable in this process.
At RMO Lawyers, our team is here to ensure you understand your rights and help you navigate the trust and estate administration process so that you can secure access to your rightful inheritance. With decades of experience and a comprehensive understanding of laws surrounding trust and probate administration in California and Texas, we empower our clients to navigate the legal process. We navigate every case with a sense of compassion and understanding for complex family dynamics to bring about the best possible outcome for all sides.
Don’t wait to protect your inheritance. Schedule a consultation with our team today to learn more about your rights as a beneficiary and how we can help you navigate important legal processes.
RMO LLP provides personal and efficient inheritance dispute services to individual and institutional clients. The firm’s attorneys focus on probate litigation involving contested trust, estate, probate, and conservatorship matters. Serving California and Texas, with offices in Los Angeles, Pasadena, Orange County, San Diego, Fresno, the Bay Area, Dallas, and Houston. For more information, please visit RMO Lawyers.
