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  • Writer's pictureJerry Ipsen, CFE, MBA

Fiduciary Accountability to Beneficiaries

Do you believe you are a named beneficiary in a trust? Has someone passed on and you believe you were named as a beneficiary in their will, yet you have not been notified? As a beneficiary, you may have concerns about how the fiduciary has been managing the assets and affairs? There are remedies available to beneficiaries, and a good estate and trust litigation attorney can help to find out answers to your questions, up through filing an action in court if need be to force a fiduciary to produce documents. Estates often include the individual’s will (if they made one), and a trust document which details what is included within the trust as well as the trust's purpose. Both types of documents would identify beneficiaries. Fiduciaries are often required to complete and file inventories and periodic accountings detailing the assets and activity of the fiduciary. The fiduciary must certify under oath stating that all disbursements have been made in accordance with the wishes of the will or trust document.

Regarding distributions, if you are a beneficiary and there are assets available for distribution, you should receive what you are entitled to. In some rare instances, nothing is received. At a minimum, the fiduciary is generally required to certify that all distributions have been made to the beneficiaries. Depending upon the jurisdiction of the fiduciary matter, the fiduciary may have had you as a beneficiary sign and return a final notice of distribution and the stated amount you received.

Depending on the nature of the fiduciary context, beneficiaries are often entitled to access to the financial information, to satisfy themselves about the activity. In those instances, the fiduciary must produce documents. As a beneficiary, you are entitled to the information. If you feel the amount you received is incorrect and the fiduciary has failed to provide a satisfactory response, you as a beneficiary have options. The estate and trust litigation attorney you've retained could file a motion forcing the compliance of the fiduciary to provide documentation referencing the wishes of the deceased to include an inventory of the initial assets right through the disposition of those assets. Should the fiduciary be unable to provide such documentation, the fiduciary may be forced into court where the will or trust document can be reviewed along with supporting documentation proving the distribution of assets. If the court is not satisfied with the Fiduciary’s account of events and/or the lack of supporting documentation, the Fiduciary could be found personally liable for those funds not properly disbursed, or worse, diverted from beneficiaries for personal purposes.

Sadly, there have been cases where the fiduciary has stated that an heir search had been conducted to no avail, when in fact no such search was conducted. Or a confused beneficiary signed and returned an affidavit claiming to have received proper disbursement when they had not received anything. Or where the Fiduciary had actually diverted the money that should have been properly disbursed to the heirs/beneficiaries. Thankfully, while issues do occur, it is our hope that they are not common practices of fiduciaries, but they do happen.

It’s in these matters that a trust and estate litigation attorney can best serve you, and provide the information you seek.

Thank you Stephen Pedneault for your mentoring and assistance.

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