Whenever there is a trust litigation, the root cause is usually based on the trustee’s failure to fulfill their statutory duty of communication. In a state like California, there is a fiduciary relationship between a trustee and a beneficiary, demanding proactive transparency and detailed information disclosure.
Silence is a breach of duty
The California Probate Code states that a trustee has an ongoing obligation to keep beneficiaries reasonably informed of the trust and its administration. This means communication must be proactive, timely, and complete. But if a beneficiary feels ignored or suspects any wrongdoing, they might feel like legal action is the only way to obtain information.
Two documents that can prevent conflict
In the Probate Code, there are some documents that must be delivered to beneficiaries:
- Notice of irrevocability: If a revocable trust becomes irrevocable (something that usually happens upon the trust settlor’s death), the trustee must formally notify all beneficiaries of the trust’s existence within a period of 60 days. If the trustee does not send this notice on time, the beneficiaries will have the right to sue.
- Formal accounting: A trustee has to provide a detailed accounting of all income, assets, fees and expenses in a clear, concise and understandable way. Litigation often centers on accountings that are vague, disorganized, or do not itemize key expenses.
An efficient trustee knows that effective communication is the best defense, so they can deliver all notices on time and answer all requests swiftly.
Counseling matters
Managing a trust requires precision, and an experienced attorney can help with maintaining order and clear communication, preventing conflict with beneficiaries and aiming for transparency.