Nov 11, 2022 How Do Beneficiaries Get a Copy of a Trust?

Family members who work with good estate planning attorneys often create trusts into which they transfer assets that they intend to pass on to beneficiaries. The trust allows them to minimize estate taxes, protect assets from creditors, and preserve their eligibility for public funded elder care, among other benefits.

But trust documents are not public records. How can you get a copy of a trust that might name you as a beneficiary? New York law protects the confidentiality of private trust documents from those who are not beneficiaries but provides that trust beneficiaries have a legal right to obtain a copy of the trust documents.

Who Can Have Access to Trust Documents?

Trusts differ from wills in several significant ways that make them more attractive to some people choosing an estate plan. When a person with a will dies, the probate process requires the will to be filed with the court where the proceedings are public. When the settlor of a trust dies, the assets in the trust do not need to go through the public process of a probate proceeding.

Since trusts do not need to be probated, the terms of the trust and its assets remain private. That privacy is highly valued by people who don’t wish to disclose their wealth or share details about how and to whom the trust assets will or will not be distributed. The trust beneficiaries can also be shielded from public disclosure of their expected trust benefit.

The trustee owes a fiduciary duty to the beneficiaries of the trust. The fiduciary must provide a copy of the trust to any “direct” beneficiary, or “vested beneficiary,” who requests one. In the context of trusts and estates, the term “beneficiary” generally describes someone who “derives a benefit or advantage” from a trust or a will. But all named beneficiaries do not necessarily share equal standing.  

All Beneficiaries Are Not Created Equal

A direct beneficiary or a vested beneficiary is someone who has an immediate right to benefit from the trust. They may have a current right to receive distributions from the trust and their right to receive those distributions cannot be interfered with.

A contingent beneficiary is a person who has no current right to receive anything but is in line to receive the benefit if a specific contingency occurs. For example, if the direct, vested beneficiary has one child, then the child may be a contingent beneficiary if they are next in line to receive the benefit after the parent’s death. If the terms of the trust direct that the parent’s beneficiary status passes to the child, then the child’s contingent interest becomes a direct or vested interest upon the death of the parent.

The trustee distinguishes between a direct beneficiary and a contingent beneficiary because they owe their primary fiduciary duty to the direct beneficiary. Until a person becomes a vested beneficiary, they don’t possess anything but a potential or presumptive interest in the trust assets. While a presumed  beneficiary has more of an interest in a trust than a stranger, the trustee does not yet owe them the same fiduciary duty owed to the vested beneficiary.

A trustee must provide a direct or vested beneficiary with copies of all trust documents and, periodically (it varies among the states), an accounting of the trust assets. Depending on the type of trust in question, a contingent or presumed beneficiary may be provided with a trust copy, but they have no rights to demand an accounting of the trust assets.

The Rights of Contingent Beneficiaries in Revocable Trusts and Irrevocable Trusts

Another important factor that affects a contingent or presumptive beneficiary’s power to obtain documents and detailed information pertaining to a trust is whether the trust is revocable or irrevocable.

Revocable Trust Contingent Interests — The terms of a revocable trust and the assets it holds can be changed by the settlor at any time before their death. As long as the trust remains revocable, a contingent beneficiary has no recognizable interest and need not be given any information about the trust by the trustee.

The situation is like that of a person named in someone’s will while the will testator is still living. The testator can write a new, superseding will, excluding persons they included in an earlier version. No one named in the will of a living person has any legal interest in the assets that might someday be distributed to them from the estate. That legal interest only arises and becomes effective when the testator dies.

For much the same reason, a person named as a contingent beneficiary in a revocable trust whose terms the trust settlor can change at any time has no legal standing with respect to the trust assets.

Irrevocable Trust Contingent Interests — When a trust is irrevocable, it means that the trust is set and unchangeable in most circumstances. While the assets of an irrevocable trust may sometimes be poured over into another trust with different terms (a process called “decanting”), this usually occurs only to correct errors or clarify ambiguities in the original trust.

Generally, a presumed or contingent beneficiary has some right of recognition by the trustee, despite  holding only a potential interest dependent upon a contingency. The trustee will usually be obliged to provide someone in this position with copies of relevant trust documents, although the presumed or contingent beneficiary still lacks standing to demand an accounting.

Getting Trust Documents Through Another Beneficiary

In most cases, getting copies of documents about a trust in which you have an interest, even a contingent one, should not be difficult unless the parties involved are estranged or hostile to one another. If you are a contingent beneficiary whose parent or other close relative is already a vested beneficiary, then, typically, you can easily direct the trustee to provide you with the trust information that you desire.

Experienced trust and estate lawyers who are advising trustees or who are trustees themselves will typically have no reason to object to, or resist sharing trust documents with contingent beneficiaries who have a legitimate reason to ask for them.

If you have questions about getting copies of trust documents, or if you are a trustee and you need advice about how to perform your fiduciary duties, contact Ely J. Rosenzveig & Associates. Our trust and estate lawyers have extensive experience serving as trustees, and effectively representing trustees and trust beneficiaries.
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