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If you have been named the trustee for a loved one’s irrevocable or testamentary trust, you may find yourself with a lot of responsibilities you were not fully prepared for. Especially when the beneficiaries are your friends and family, it can be hard to navigate the emotions and obligations that come with managing and distributing the trust’s assets. Here is what to do if you are a trustee and get a letter from a beneficiary’s attorney to meet your fiduciary duties and maintain your relationship with your beneficiaries.
There are a few reasons why a trustee might get a letter from a beneficiary’s attorney:
Beneficiaries can communicate with trustees directly. But they may choose to hire an attorney to facilitate communications or navigate difficult legal or financial issues. While some of the reasons a trustee might get a letter from a beneficiary’s attorney are negative and can result in conflict, others give you an opportunity to cooperate with your beneficiary’s attorney to take care of their needs.
Under the Florida Trust Code, trustees have specific duties to the trust they manage and its beneficiaries. There are several different overlapping fiduciary duties that apply to trustees, including a duty to keep the beneficiaries informed and communicate with them about the trust. In addition, a trustee needs to maintain the trust’s assets and provide accountings of the accounts and expenses related to administering the trust.
This duty to communicate is one reason why you might receive a letter from a beneficiary’s attorney. If you are running late in providing an accounting according to the trust documents, or if there is some question about where the trust’s money is going, your fiduciary duty requires you to respond to your beneficiary’s requests. Otherwise, it could expose you to a petition for your removal, or even a lawsuit for breach of your fiduciary duty.
Given your fiduciary duty to communicate with your beneficiaries, you should take any letter you receive from a beneficiary’s attorney seriously. But that doesn’t mean you should react negatively or aggressively to a simple request for information. Instead, you should perform your duties professionally, or get help to do so.
The best way to avoid a petition or lawsuit related to your fiduciary duties as trustee, you should respond promptly to any letter from a beneficiary’s attorney. Even if you need more time to update the trust accounting, or to investigate a legal question, you should acknowledge receipt of the letter and set expectations for when and how you will provide a meaningful response. Be polite and professional in your response, and don’t be afraid to ask for clarification if you need more information.
One reason beneficiaries retain attorneys rather than communicating with a trustee directly is to provide distance between highly emotional issues and their family members serving as trustees. Sibling rivalry and other family dynamics can cause a lot of strain between trustees and their beneficiaries. But your relationship with your loved ones came before the trust was founded and will likely survive long after the assets are distributed. It is important to keep those relationships in mind when responding to beneficiaries’ letters and demands, and avoid responding while angry or otherwise escalating emotions between yourself and the beneficiaries.
If the trust's beneficiaries have retained an attorney, it is probably a good idea to do the same as the trustee. Often, the trust attorney who helped the grantor draft the original trust documents can be retained to advise you about your rights and responsibilities as a trustee. However, if the situation has escalated and you expect trust litigation will occur soon, it may be better to hire a probate litigation attorney to represent the trust, and your interests, in court.
When beneficiaries or other interested parties contest a trust, it starts a complicated and emotionally taxing legal process that can take months to resolve. However, working with a trust attorney from the start can help you resolve the issues that caused the beneficiaries’ attorney to contact you more quickly, often without a petition ever being filed. Through mediation, negotiations, and clear communication, you and your trust attorney can meet your fiduciary duties and ensure that the trust grantor’s wishes are upheld.
At Harrison Estate Law, P.A., our experienced trust and probate team knows what to do when you receive a letter from a beneficiary’s attorney demanding information or challenging a trust. We can help meet your fiduciary duties and respond to a trust contest lawsuit, as well as use out-of-court options to accomplish your goals and satisfy the trust’s beneficiaries. We will help you be sure your family members’ trust is handled properly so it can provide for your family’s needs for years to come. Contact us here or call 352-559-9828 to get help today.
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