RIGHTS & PROCESS

Client Question:

My Trustee will not make a distribution to me although I have asked him to do this many times.

In addition, the Trustee of my dad's Trust gives my brother twice as much as he gives me each year. Is there anything I can do?

Recommendations:

First, try to obtain a copy of the Trust instrument. While the better practice is for the Trustee to provide a copy of the Trust Document to the beneficiaries, apparently there is no specific statute requiring that the Trustee do this.

Once you have copy of the Trust document, read it carefully. It contains the basic requirements that the Trustee must follow in making distributions. In addition, there are usually duties imposed by law defining what a Trustee can and cannot do.

In addition, if the Trust was established in a Will, then you will probably be able to obtain a copy of the Will from the appropriate Probate Court. Recent Texas legislation requires executors to provide Will beneficiaries under a Will with notice and a copy of the Will. In any event, if you know that there was a Will probated, it most likely is public record and available at the courthouse for copying. Unfortunately, under Texas law beneficiaries of a trust established by a Will may not be entitled to such notice. Only the Trustee gets the notice.

As to beneficiaries, a typical trust may have classes of beneficiaries. One typical Trust plan of disposition is for someone to be a primary beneficiary for his or her lifetime: this is known as a "life beneficiary." Typically this is a surviving spouse, and he or she will be entitled to distributions of most, if not all, of the income generated by the trust. Also, the life beneficiary may have rights to some (or even all) of the trust principal. Under such a plan of distribution, any children's rights to distributions typically begin after the surviving spouse dies. The children in this instance would be known as "remaindermen". Remaindermen, however, are still entitled to disclosures, and the Trustee owes a full duty of loyalty to them as well as the life beneficiary.

The attorneys at McCulloch & Associates are familiar with the rights and process for handling a trust and are available to assist families with the creation of trusts, wills and estate planning documents.