Setting up a trust is just the beginning of the process of carrying out the intent of that trust. There are many steps following the creation of the trust which are necessary to facilitate its intent. Dworken & Bernstein’s attorneys help their clients facilitate the administration of trusts. Individuals often create trusts as part of their estate planning process, but the trust must be administered during life, or more often, upon their death. The trust may have been funded at the time it was created, but if it was not, the trust assets will need to be transferred into the name of the trust. Beneficiaries of the trust will receive notice and contact information of the trustee and can make requests to the trustee for information regarding how the trust is being administered.
Trustees have fiduciary duties under the law to act in the best interest of the beneficiaries. Ohio Revised Code 5808.13 requires that a trustee “keep the current beneficiaries of the trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests.” Depending on how the trust is structured, payments to the beneficiaries may be within the discretion of the trustee, in which case, the trustee will need to determine when and in what amount to make disbursements. Matters can get more complex for the trustee if there are multiple beneficiaries, meaning that discretionary disbursements to one beneficiary now, reduces the amount of the trust for discretionary disbursements to other beneficiaries down the road. Trustees should be prepared to support their decisions and document them by carefully recording when and what disbursements each beneficiary received. Trustees may seek legal counsel to assist in advising them in executing their duties.
Trust beneficiaries may also choose to seek the advice of counsel if they unsure as to whether they are receiving what they are supposed to under the trust. Beneficiaries have the right to receive certain financial information regarding the trust assets, and if they’ve attempted to obtain this information from the trustee, they may need to take further action to ensure that their interests are being protected. Ohio law requires that a trustee keep the beneficiaries reasonably informed regarding the administration of the trust. The purpose of this rule is to give the beneficiaries the information necessary to determine if the trustee is mismanaging the trust.
Our attorneys are trusted advisors and can help you understand and manage these matters.