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Why keeping beneficiaries informed is crucial in trust administration

On Behalf of | Nov 29, 2023 | Trusts

A trustee must maintain a balance between skillfully managing a trust and maintaining a good relationship with the people involved in the trust’s administration. This includes regularly and clearly communicating the necessary information to the beneficiaries to allow for a smooth process.

As a trustee, you must regularly inform the beneficiaries about updates on the trust administration for the following reasons:

To comply with the law

Under California laws, trustees must keep beneficiaries reasonably informed of the trust and administration. If the beneficiaries request for it, the trustee must provide information relevant to the beneficiaries’ interests.

This keeps the beneficiaries on the loop regarding the trust administration, especially about how the trustee is managing the assets and when and how they will conduct the distribution.

To ensure proper distribution

Your primary duty as a trustee is to manage the trust’s assets and distribute them according to the trustor’s wishes. Regularly communicating with the beneficiaries will allow you to smoothly process the trust’s administration while managing their expectations accordingly.

To avoid misunderstandings

If you do not update the beneficiaries on the latest development of the trust administration, they might question your transparency and credibility as a trustee. They may think that you are misappropriating the trust assets or are failing to efficiently perform your duties as the trustee. This may lead to disputes resulting to the trust administration’s delay.

By ensuring that the beneficiaries are well informed on the progress of the trust administration, you can avoid misunderstandings.

A practice that helps you fulfill your duties

Keeping trust beneficiaries informed ensures legal compliance, facilitates better decision-making and creates transparency among the people involved. Overall, these will help in the smooth operation of the trust.

Understandably, a trust’s administration is a heavy responsibility for a trustee. Having competent legal guidance can help you ease those burdens.