Beneficiaries: How to Deal With a Rogue Executor or Trustee
Last April I blogged about The 3 Habits of Highly Effective Trustees and Executors. As a reminder, they are: (1) Read (re-read) the trust and/or will (and follow the terms); (2) Communicate with beneficiaries — early, often and well; and (3) Document and keep records.
But what if you’re the beneficiary of an estate or trust and the executor or trustee didn’t read my post and doesn’t practice these good habits? How can you, as a beneficiary, best navigate this difficult situation?
With the necessary caveat that every estate has its own unique dynamics, here are some general considerations:
1. Understand your rights and the process. Remember how I explained that an executor or trustee needs to actually read their operating instrument? The same holds true for the beneficiary. Of course, the document is not going to spell out each and every right and consideration for every beneficiary, but it’s definitely a starting point. You don’t want to be making demands that directly contradict the terms of the instrument. If you are a current beneficiary and don’t have a copy of the will or trust, ask for it. And then read it.
Also, understand that estate and trust administration is a process. That scene in the movie where the family immediately gathers in the attorney’s office for the “reading of the will” and distribution of the estate? No, that doesn’t happen. Understand and respect the timeline and the significant work that needs to be done.
2. Document your efforts. If the fiduciary is ignoring you or refusing reasonable requests for information, document your efforts in writing. Letters and e-mail provide a good paper trail. For phone calls or meetings, contemporaneously memorialize your interactions in writing. If push comes to shove and shove comes to litigation, a paper trail documenting what did and did not happen is critical.
3. Be reasonable. This can be a tough one. You might be dealing with an unresponsive or unreasonable fiduciary. But being unreasonable in kind is not the best way to respond. Sending a 10-page list of questions and demanding a complete response within 24 hours is probably not reasonable. It’s also generally unwise to rush into court for a ruling on every administrative disagreement. Don’t confuse being reasonable with being a pushover though. Be reasonable, yet firm.
4. Consider hiring counsel. Retaining an attorney is usually not the first consideration for a beneficiary. The truth is that most beneficiaries do not need their own attorney. While I’ve had the opportunity to help many beneficiaries, I’ve also consulted with some whom I’ve ultimately suggested not hire me — sometimes because the amounts or issues in play are not sufficient to warrant the cost.
In other cases retaining an attorney to assist and advocate can be very helpful, or even essential. If you need to go to court to enforce your rights or to ask for removal of the executor or trustee, you need counsel. If the situation involves the possibility of contesting a will or trust instrument or filing a claim against the estate or a spousal renunciation or award, then there are statutory deadlines for which timely action and procedural precision is critical.
Estate and trust administration is sometimes complicated by misinformation coupled with emotion and loss. Beneficiaries need to be aware of rights in order to protect their interests. If you are a beneficiary in need of possible beneficiary representation in the Chicagoland area, please call us at (847) 991-2250 for a phone consultation to discuss the situation.
Image courtesy of freedigitalphotos.net/Stuart Miles