My sister is the trustee of our parents' revocable trust. We will soon be selling their house and property. I feel there is a lot of unnecessary money being spent. Is she accountable for what comes and goes out of the checking account? Do I have a right to know what is financially going on? If so, does she notify me or does the attorney?
It has been almost a year since our parents died and I have no idea where we are financially. I have been involved in preparing the property and house for sale. Do I have a say in accepting an offer or not? My sister feels it is her responsibility as trustee to handle everything without including me. Thank you for your time.
A: I have not reviewed your parents' trust, so can only respond based on general principles of trust administration.
In most trusts, trustees are granted broad powers of administration. However, that does not mean that the power is absolute. A trustee is a fiduciary and owes a duty to the beneficiaries of the trust. The beneficiaries do not owe a duty to the trustee.
Most trustees understand the responsibility they have been given and work very hard to carry out terms of the trust. They attempt to make reasonable decisions that will be beneficial to all, including decisions that affect the trustee (if the trustee also happens to be a beneficiary). Unfortunately, on occasion, some trustees forget this duty and become high-handed and secretive. Such behavior sows the seeds of mistrust in the minds of the beneficiaries.
All trustees are required to administer the trust according to its terms. Although it is uncommon, some trusts state that a trustee is not required to account to the beneficiaries. Even if such a provision is included in a trust, the trustee is still required by law, upon request of a beneficiary, to provide information relating to the administration of the trust that is relevant to that beneficiary's interest.
Assuming that you and your sister are beneficiaries of the trust and the assets are to be distributed to the two of you, you have the right to request financial information because it affects your interest in the trust. If your sister has an attorney, you certainly can make a request to the attorney for that information, but are not required to do so. You can make the request directly to your sister.
If the trust does not contain a provision waiving the requirement, a trustee is required to provide an account of the trustee's transactions to the beneficiaries on an annual basis. A beneficiary has the right to object to transactions with which the beneficiary does not agree.
The trustee has been charged with the duty to administer the trust's assets. Therefore, your sister has the legal right to accept or reject any purchase offers for the property. She does not first have to obtain your consent to any offer.
However, because her decision will be reviewed by you, and you can object if you feel the offer she accepted was not reasonable, there is no harm done if she keeps you informed of the progress of the property's sale.
As a beneficiary, you should also be reasonable and remember that the trustee has been given the authority to administer the trust. Keeping the lines of communication open between a trustee and the beneficiaries is essential to ensuring a smooth trust administration.