Notifying Beneficiaries of a Trust

When a Grantor passes away, the Trustee of the estate must step into action. There are numerous tasks to complete, including collecting assets, paying taxes and bills, filing accountings, managing money for beneficiaries, and more. One of the very first things the Trustee must do is notify the beneficiaries, describing the situation (the Grantor’s death, the state of the trust, their role as Trustee) and explaining that they will be handling and distributing the trust’s assets. In some states, there are particular rules about how and when you must notify beneficiaries; in other states, the requirements are more lenient. If you’re curious about the details of this process, scroll down to learn more about how to go about notifying beneficiaries of a trust as a Trustee.

Notifying Beneficiaries of a Trust

If you’re a Trustee, notifying the beneficiaries of the trust is a legal responsibility. As soon as you take over the trust, you need to let the beneficiaries know and keep them updated. Some states require Trustees to include certain information in their notice, but usually a simple letter will do. You need to explain that:

  1. The Grantor has passed away.
  2. The trust has become irrevocable.
  3. As Trustee, you are in charge of the trust assets.
  4. You will be managing and distributing the assets to the beneficiaries.
  5. The beneficiaries have the right to request a copy of the trust document (which you will send them, if they request it).

Distributing the assets may take some time, so be honest and explain the process could take anywhere from a few weeks to a few months, depending on the complications that arise (debts, taxes, legal challenges etc). In your letter, you will also need to provide your name, address, and any other preferred communication method (phone number, e-mail address, etc.), so the beneficiaries know how to get in contact with you. Finally, be sure to provide a deadline for court challenges in case a beneficiary wishes to contest the validity of the trust. This is very rare, but it is possible, and the beneficiaries need to know the exact deadline for such a challenge.

STATE LAWS

Some states (including Missouri) require Trustees to send notices to beneficiaries. Sometimes there is a deadline, sometimes other people must be notified as well (like heirs and qualified beneficiaries), and sometimes specific language is required. Research your state’s requirements or speak with an experienced attorney to ensure that you notify the beneficiaries properly and promptly, following all applicable state rules.

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Notifying beneficiaries of a trust is crucial, because the beneficiaries have a right to know who is managing the trust, how the Trustee is handling the trust assets, and who they can contact for more information. This is the first step of many, so complete it with care. Good luck!

If you need help creating your estate plan and you live in southwest Missouri, contact the attorneys at Parks & Jones. We would be happy to help you build or update your estate plan. Give us a call at 417-823-9898 or click here to schedule a free consultation.

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