Unfortunately for successor trustees, it is not uncommon for the various beneficiaries of a trust to not get along. There may be a dispute as to the interpretation of the trust instrument or discontent over the planned distributions to each beneficiary. Regardless of the reason for the issues between beneficiaries, trustees should be especially wary when they terminate a trust.
The following are recommended steps to take to minimize risks when there are issues among beneficiaries as you terminate a trust:
- Consult with an experienced Anaheim trust administration lawyer before taking any actions.
- Prepare a formal accounting rather than obtaining waivers from the beneficiaries.
- Consider seeking court approval of your actions as you terminate the trust, including the proposed distributions to beneficiaries. Involving the court will give beneficiaries a set amount of time in which to object. Failing to object will significantly reduce the risk of future litigation. Beneficiaries will have lost the ability to complain about your trust administration actions.
- Pay close attention to the time limitation that a beneficiary has to object to your trust administration. Generally, the beneficiary has three years after the date of termination of the Anaheim trust.
- Consider using a trust distribution and termination agreement.
- Communicate often and practice transparency. Often, simply keeping all of the beneficiaries as informed as possible about the trust proceedings can prevent disputes.
Successfully administering a trust in California, especially when there are beneficiaries who do not get along, requires knowledge, experience, and careful attention to the duties and responsibilities of a trustee. Our guide, Understanding the Revocable Living Trust – In Language that Anyone Can Understand in 8 Minutes, provides valuable information about living trusts and how they work. To learn more, contact an experienced Anaheim trust administration attorney today at (714) 282-7488.