Trustee Continuous Reporting of Actual and Proposed Significant Events

Trustee Continuous Reporting of Actual and Proposed Significant Events

By David W. Tate

California Probate Code section 16061 provides:

"16061.  Except as provided in Section 16069, on reasonable request
by a beneficiary, the trustee shall report to the beneficiary by
providing requested information to the beneficiary relating to the
administration of the trust relevant to the beneficiary's interest."

The section 16061 entitlement is different from and in addition to a beneficiary's right to an accounting.  Only a few cases interpret the scope and intent of section 16061; however, clearly the section is broadly worded, requiring that the trustee provide the beneficiary with information "relating to the administration of the trust relevant to the beneficiary's interest."  Although the section 16061 entitlement should not be permitted to allow a beneficiary to pester a trustee or to micromanage the trust, it is reasonable that a beneficiary would be concerned about significant events that affect his or her trust interests on an ongoing basis, and would want certain information about those interests regularly and more often than would be provided by an accounting.  The issue becomes, what is a reasonable request-how often, what information, and how significant would the requested information be to the reasonable beneficiary?  And, from the trustee's perspective, generally I lean toward providing a beneficiary with additional information to better avoid disputes, or to at least flush them out earlier with the hope that they can be avoided entirely, or resolved earlier.  Events and actions or proposed actions will eventually come to light anyway.

Which raises another topic area.  A trustee is permitted to provide the beneficiary with a statutory notice of intent to take a particular action, thus triggering the beneficiary's obligation to object to the proposed action, or waive the right to object after the expiration of the statutory notice period.  As section 16061 entitles a beneficiary to request the trustee to provide the beneficiary with information "relating to the administration of the trust relevant to the beneficiary's interest," a beneficiary might request the trustee to provide information about proposed significant events or actions before they occur.  For example, proposed encumbrances and loans, property sales, significant expenditures, transfers and distributions, out-of-ordinary events and transactions, etc., as defined "significant."

DAVID W. TATE, ESQ.

E-mail: tateatty@yahoo.com; Website: http://davidtate.us

Blogs: http://davidtate.wordpress.com; http://californiaestatetrust.wordpress.com

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