This is a common question. Unfortunately, the answer is, “it depends.” The rights of a beneficiary depend on the type of trust and the type of beneficiary.
Trusts are made up of legal documents wherein an individual (“grantor” or “settlor”) places assets to be held by someone in a position of trust (“trustee”) for a period of time and use for a named person or persons (“beneficiaries”). Trusts can be either revocable or irrevocable. Meaning they can be changed or not changed.
As the beneficiary of a revocable trust, your rights are few. This limitation results from the grantor holding back the right to make changes to the trust. Until the grantor dies (making the trust irrevocable) or until the terms of the trust dictate that the trust becomes irrevocable, the rights of the beneficiaries, the terms of the trust or the trust itself can be changed.
Upon becoming irrevocable, or for irrevocable trusts, beneficiary rights are more straightforward. First, your rights are governed by the trust document itself. The grantor who entered into the trust decided what he or she wanted you to have and when. More succinctly, the document controls your rights. In 2007, Ohio adopted the Ohio Trust Code. Under the OTC your rights as a beneficiary are spelled out, in addition to the grantor’s rules regarding your rights.
As a beneficiary of an Ohio-based trust, you’re entitled to see the trust instrument if you ask for it. Whether or not you request it, you’re also entitled to a yearly accounting of the trust if you’re a current beneficiary of the trust (entitled to income or distributions currently). This accounting includes the assets and liabilities of the trust, how the trustee was compensated and the value of the assets of the trust. Don’t fret though. Even if you’re not a current beneficiary, if you ask for the report, the trustee must provide it to you.
Ohio’s Trust Code goes even further. The OTC lists the rights of beneficiaries depending on the age of the beneficiary, the beneficiary’s status as being a current beneficiary or not and the date the trust was entered into or became irrevocable. Trusts can be tricky. As a beneficiary, you should know your rights. If you have questions regarding your rights as a beneficiary of a trust, call the attorneys at AlerStallings. We can be reached toll free at (877) 912-3464.