When Do You Need a Trust Protector?
A trust protector is someone who is appointed to watch over a trust that will be in effect for a long time and ensure that it...Read more
As a trust beneficiary, you may feel that you are at the mercy of the trustee. But depending on the type of trust, beneficiaries may have rights to ensure the trust is properly managed.
A trust is a legal arrangement through which one person, called a “settlor” or “grantor,” gives assets to another person (or an institution, such as a bank or law firm), called a “trustee.” The trustee holds legal title to the assets for another person, called a “beneficiary.” The rights of a trust beneficiary depend on the type of trust and the type of beneficiary.
If the trust is a revocable trust — meaning the person who set up the trust can change it or revoke it at any time — the trust beneficiaries, other than the settlor, have very few rights. Because the settlor can change the trust at any time, he or she can also change the beneficiaries at any time.
Often, a trust is revocable until the settlor dies, and then it becomes irrevocable. An irrevocable trust is a trust that cannot be changed except in rare cases by court order. Beneficiaries of an irrevocable trust have rights to information about the trust and to make sure the trustee is acting properly. The scope of those rights depends on the type of beneficiary:
For example, a wife may set up a trust that leaves income to her husband for life (the current beneficiary). Then the remainder of the property to her children (the remainder beneficiaries).
State law and the terms of the trust determine exactly what rights a beneficiary has. However, the following are five common rights given to beneficiaries of irrevocable trusts:
Find more information about a trustee’s duties.
Learn more about trusts.