Is it standard procedure to get signature of beneficiary on a receipt and refund bond for final distribution?
Aurora, IL |
i have not received a satisfactory final accounting and have many unanswered questions before i feel comfortable signing such a document. i don't believe that the trustee or co-trustee have followed their fiduciary responsibilities
If the form you are referencing is a “Refunding Bond and Receipt" the purpose of that document is to allow an Executor or in your case the Trustee to make distributions out of an Estate where there is a possibility of some future Estate obligation which would require you to return a portion or all of the distribution. These are most common with partial distributions where the Estate maintains sufficient assets to pay any outstanding liabilities, such as taxes, where the final amount has not been determined. It is unusual to do this with a final distribution. The refunding Bond implies the existence of possible obligations of the Trust, and in such situations the Trustee generally will maintain a reserve of at least 1 1/2 times the possible obligation. However, in your case the Trustee might be trying something different. Assuming there is no Probate matter pending, and you have told the Trustees that you object to the Final Accounting and will not approve it, then the Trustees may be taking this action to get around your disapproval. If you wish to pursue your complaint against the Trustees and make any claim of breach of fiduciary duty you will have to bring a Court action. If the Trustees do not think they did anything wrong and/or do not believe you are willing to spend the money necessary to bring such an action, the Trustees could be taking this step to distribute the Trust assets to all the other beneficiaries. That way the only one not paid is you, and you must take the affirmative action of filing a lawsuit in regard to your complaints, however if you do file such a lawsuit the other beneficiaries will have to return a portion or all of their shares under the Refunding Bond so the Trust can defend itself, paying its attorney’s fees and costs. If that is the strategy, the Trustees will take no further action in regard to you or the Trust until you decide to accept the money or file a lawsuit. Be careful, there is a period of time, referred to as the statute of limitations, which require you to file any such action within a certain time period or you lose your right to file the action. However, the offer of a distribution to you might be a risky move by the Trustees if the Refunding Bond and Receipt does not contain an acceptance of the final accounting, since it could provide you with the funds you need to pursue an action against the Trustee. You need to retain an experienced Probate/Trust Attorney to review the matter, advise you as to whether the Trustees may have breached their fiduciary duty as well as to advise you in regard to bringing any action if you decide it is the right thing to do. Good luck.
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There may be a difference between your version of a "satisfactory" accounting and the law's recognition of a "satisfactory" accounting. The terms of the trust generally control, and if there are gaps in the trust, the Trusts and Trustees Act will fill the gaps.
If you're concerned or wary of what the trustee has done or is doing, hire a lawyer to represent your interests. Most beneficiaries mistakenly believe the trustee's attorney is also their attorney. You can retain your own counsel to represent you. Normally, when my office is contacted, we review the terms of the trust, the duties of the trustee, the provided accounting (if any), and whether a breach of fiduciary duty may have occurred.
The Law Office of Matthew R. Davison
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Wauconda, IL 60084