Trusts are a common and very useful instrument for estate planning. There are a myriad of different types of trusts, and each different type can be used to suit the particular needs and goals of the individual case. All trusts do have some qualities in common, however. All trusts will have a trustee, who is responsible for administering the trust and making distributions. All trusts will also have at least one beneficiary, who is the person, entity, or even animal who is named to receive the distributions. In the best of circumstances, the trustee and the beneficiary will be able to communicate and work together amicably. However, in some cases, a trustee and beneficiary may not see eye to eye, and a trustee may ask whether he or she may refuse to distribute the assets in the trust.
A trustee’s primary responsibility is to make sure the trust is administered pursuant not only to Minnesota law, but also according to the provisions in the trust documents. The trust documents will have specific instructions as to how, when, and why distributions from the trust are to be made. In some cases, those instructions will be based on a timeline, such as when a beneficiary reaches a certain age. Other times, the instructions require distributions be made to accomplish particular goals, such as furthering the education of the beneficiary. The trustee has what is called a “fiduciary duty” to administer the trust in accordance with what is best for the beneficiaries and pursuant to the trust documents. In other words, the trustee is not permitted to substitute his or her own judgment for that of the trust documents. Accordingly, if the trust documents are specific as to when and how the distribution should be made, then the trustee cannot decide to simply not make the distribution. If a trustee does not act according to the instructions in the trust documents, the beneficiaries can file suit to require the trustee to make distribution. If the infraction is serious enough or if the trustee has repeatedly refused to act in accordance with the trust documents, the beneficiaries may request that the trustee be removed completely.
If you have questions about your rights and responsibilities as a trustee or a beneficiary, contact us today. Call us at 651-413-9568 to talk about your case and your goals.