My brother and I are beneficiaries of seperate educational trusts, set up by our grandmother. Our mother is the executor of this trust and has always done the paperwork every year to obtain the trust interest and provide us with the apropriate tax paperwork. However, it is never given on a specific date, usually just days before Taxes are due, and this year she is threatening to with hold interest funds due to a family fued. Can she do this? what are our options to receive this money in a timely manner?
Estate Planning Attorney
Trustees in California must provide an annual accounting to the beneficiaries of the trust. California Probate Code Section 16062. There are exceptions to this general rule, for example, if the trust instrument itself waives the duty to account. However, it sounds like there is a duty to account because your mother has provided a financial report in the past at tax time.
The law does not require the annual accounting to be presented on any certain date, only that it be provided "annually".
As to withholding funds, these kinds of trusts are often discretionary, that is, they give the trustee a great deal of power of whether to make distributions or not, based on their discretion.
If you do not have a copy of the trust document itself, you should request a copy. The trustee must provide it to you under Probate Code Sections 16060-16061.5.
The best advice is to try to work things out with your mother/the trustee. The Probate Code provides remedies for demanding an accounting, etc., but that requires filing a petition with the Probate Court and taking your mother to court.
I like that prior answer but I would say that she is being unreasonable. You have to read the trust document to find out what your rights are. I would ask to inspect the books. She may have discretion but she cannot abuse that discreation. I know about family feuds. It comes on about 6PM on Channel 9. See a Estate and Trust attorney .
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Although the above response is believed to be accurate, it should not be relied upon as any type of legal advice because the information provided is incomplete. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. No attorney client relation is formed with me without a written contract.
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Robert J. Suhajda, MS,CPA
17721 Norwalk Blvd. #43
Artesia, CA 90701
Former financial auditor and controller. Admitted to US Tax Court, Income Tax, IRS representation, Fiduciary income tax returns, Estate and Gift tax returns,
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I agree with the above answers provided and would only add that taking your mother to court to enforce the terms of the educational trust should be a last resort. It will likely irreparably damage your relationship with your mom and the costs and expenses to filing a Petition with the Court for a trust accounting and/or to order the distribution of income to you and your brother may exceed the distribution owed to you in the first place.
If it is at all possible to mend the feud, that would be your best option.
Although the above response is believed to be accurate, it should not be relied upon as any type of legal advice because the information provided is incomplete. It is intended to educate the reader and a more definite answer should be based on a consultation with a lawyer. No attorney client relation is formed with me without a written contract. This answer does not create an attorney-client relationship.