If you are the beneficiary named in a will or a trust in California, you have several rights and responsibilities you should consider as you move through the process of settling an estate:
Know your rights for your particular situation. 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 are in place that may impact your situation.
You are entitled to information. If you have questions, don’t hesitate to ask the executor. Make sure to do so in writing so that your request is documented.
Ask for an accounting of the estate if you have the right to do so. This allows you to get an overview of the estate and will give you a permanent record you may need to access at a later date.
Be aware of your tax consequences. Inheriting assets from an estate may trigger income tax issues for you. This generally applies to all property except for IRA and 401k distributions that get taxed before you see any proceeds. Talk to your tax professional early on so you don’t have any last-minute surprises.
You have the right to challenge your trustee if you don’t feel they are acting appropriately. You may need to retain an attorney to protect your interests or enforce your beneficiary rights. Do not be timid, it could cost you dearly down the road.
Know that trustees have rights and responsibilities too. A trustee has a fiduciary responsibility to act in accordance with the wishes of the decedent. Many times the estate grants them a certain amount of leeway, but at other times they must adhere strictly to a certain set of criteria. To ensure you are both on the same page, communicate as often as is necessary to ensure a smooth estate transfer process.
Raun Muntz O-Grady LLP serves clients in Los Angeles, Hollywood, West Los Angeles, Santa Monica, Beverly Hills, Anaheim, Orange County and communities throughout Southern California.