As a beneficiary, you may find it confusing as to what your actual role in the estate plan might be. To that end, it is important to understand what an estate plan expects of you and how you interact with the trust and trustee.
Some mistakenly believe a beneficiary holds an entirely passive role. You may find it surprising that this is not the case, but that is the first step toward understanding the role better.
Ways to optimize your interest
Forbes examines the roles that beneficiaries play in your overall estate plan. First, beneficiaries do not have any duties under trust law or fiduciary duties. This sets you apart from trustees, who often have quite a long list of duties that they need to fulfill or accomplish.
Though beneficiaries often get saddled with the label “passive role holder”, there are still ways in which you can optimize your interest in the trust. It also helps to improve your relationship with the trustee, who holds a large portion of the power here.
Building a relationship with the trustee
Some of the things you can do include:
- Knowing the terms of the trust itself
- Knowing the trust’s investment objective
- Understanding the nature of your interest
- Understanding the trust’s purpose, as the grantor intended it
You also want to understand the discretionary distribution, which the trustee will often make decisions regarding.
Strengthening this relationship is crucial if you want a productive and harmonious period of cooperation after a grantor’s death. When you understand the nature of trust administration along with the purposes for its creation, you have a stronger grasp on the situation as a whole.