If a loved one has made you the beneficiary of a trust, it’s important to thoroughly review its terms Even if your loved one discussed them with you when they were alive (if they are now deceased), you’ll want to know what the final language says.
The trust should have a trustee whose responsibility it is to adhere to the terms of the trust established by the grantor (creator) for making distributions. They may also be responsible for wisely investing the assets to grow them.
If at any point you believe the assets aren’t being distributed properly, it’s important to talk with the trustee immediately. There might be some valid reason, and you’re entitled to know what it is.
Request an accounting of the trust
If you don’t get a satisfactory answer and you’re concerned about the security of the trust’s assets, you have the right to ask for an accounting of it. That’s a detailed summary of the trust’s income, expenses and distributions. You can request this at any time.
If you’re not getting the distributions you should be, according the terms, and/or you believe the trust is being mismanaged, it’s smart to get legal guidance to help you determine your best course of action. Sometimes, just learning that a legal professional is involved can incentivize a trustee to take their role seriously.
Mediation, ADR and court actions, including removal of the trustee
If that doesn’t work, you may need to either try resolving the matter through mediation or other alternative dispute resolution (ADR) or, if necessary, file a petition with the probate court to compel the trustee to do their job.
You can also seek the removal of the trustee. Two key reasons a trustee can be removed under Texas law are the following:
- They “materially violated or attempted to violate the terms of the trust and the violation or attempted violation results in a material financial loss to the trust
- They “fail[ed] to make an accounting that is required by law or by the terms of the trust.”
The probate court has the discretion to remove a trustee and appoint any contingent trustee named by the grantor or (if there is none) someone else.
Time is of the essence if a trustee is mismanaging the assets over which they have a fiduciary duty or even if they’re just not doing their job. That’s why if you have concerns, it’s important not to wait too long to get legal guidance.