Updated: Sep 2
Attorney Thomas B. Burton is joined by Attorney Matthew Underwood, of Underwood Legal, LLC, and together they answer a question by a reader about whether the beneficiary of an irrevocable trust in Wisconsin can ask for an accounting of a trust checking account when the reader suspects that the trustee may be using funds for the trustee's own personal enrichment.
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Transcript of Video: Can a Beneficiary of an
Irrevocable Trust ask for a Trust Accounting?
Okay, welcome back today
I'm joined once again by attorney
Matthew Underwood from Madison Matt, thanks
for joining us thanks for having me today.
Tom and today's topic deals with trust accounting
so we're coming to you live from the set of
The Office here and it's only a shame we couldn't
get Angela or Oscar to join us for this question,
but instead we're going to have to handle
it ourselves Matt.
Yeah, we'll do the best we can without having
the Dunder Mifflin accounting team exactly
well we'll try to handle this one but just
accounting is a tricky area so strap in and
here's the question the writer asks it comes
from Bay City Wisconsin and the writer asks
the following as one of the beneficiaries
of an irrevocable trust, can I ask for an
accounting of the trust checking account?
I believe the trustee is using money from
the trust for personal enrichment, for example,
new kitchen cupboards.
I would like to see the transactions of the
Yeah this is a this is a really good question
and it in in my practice and probably in your
yours Tom this is an issue that comes up all
the time and I think when we have beneficiaries
that it feel like they're being left out or
that they beneficiary feel like they're not
being told everything that's going on.
I think this is exactly what happens where
there's now there's some mistrust that starts
to build and now beneficiaries aren't even
sure if the trustee is doing the right thing,
so the good thing is that the law did contemplate
this and this isn't a new situation.
I mean, there's court cases going back decades
probably hundreds of years about these very
sorts of things so under Wisconsin law beneficiaries
can actually ask for information from the
trustee and that wouldn't include an accounting
of that checking account or any sort of bank
accounts that might be in the trust so under
Wisconsin law trustees have a duty to keep
the beneficiaries reasonably informed about
the administration of the trust and at least.
Annually that trustee needs to send a report
of the trust property and that includes receipts
and disbursements and also a list of trust
assets and their values so I think this this
question gets right to it where yes the trustee
not only has a duty to carry out those trust
instructions, but the trustee needs to be
providing information to those beneficiaries,
so if it if it turns out, you know, a lot
of times beneficiaries will ask for information
and the trustees won't provide anything that
that's a reason to get your
Attorney involved and force that trustee
to turn over some of those records that you're
looking for and verify that the trustee is
doing the right thing.
And if it turns out that you review the information
and you find out trustee was stealing from
the trust buying, you know things that benefit
them and not the beneficiaries.
That's a breach of that trustee's duty, and
I think that's a reason to actually look into
removing that trustee and having another trustee
come on board who's not going to be doing
some of those things.
So if you if you do feel like you're not receiving
information or if you feel like you have some
information but you're starting to see them
some things that are wrong reach out to your
attorney and you know, start working with
that trustee and make sure things are being
And again, this is one of those areas where
you don't want to let it go too long, so if
you know if a trust has been open for two
years and for two years you had suspicions
that things weren't going right?
It's sometimes harder to go back in fix those
mistakes or those things that went wrong so
it's good to catch these.
Early and to basically let the trustee know
that hey we're keeping an eye on things
and trustee can't you know start doing things
that they shouldn't be doing because it's
just you know, we're keeping an eye and making
sure they're doing things right.
Tom do you have any thoughts on what you would
suggest or what you tell a beneficiary in
a situation like this?
I think that's spot on Matt and those duties
to report are included in the new Wisconsin
We still call it the new Wisconsin Trust code.
It was adopted July went into effect July
1, 2014, but in the trust world it's relatively
new and so I think the when they drafted the
new trust code part of the uniform trust code
that was the thinking is provide some checks
and balances on that trustee by doing this
annual reporting to the beneficiaries
So we're answering this question in 2020,
so it's likely you're falling under that new
Wisconsin Trust Code but I would say when you
go sit down with Matt or another attorney
your estate planning attorney bring a copy
of the trust along because there are some dates
if the trust was formed before created before
and it was irrevocable before July 2014, it's
possible it doesn't fall under
those reporting requirements.
But the trust itself may provide a reporting
requirement in it and a lot of them do.
So, I would just bring that copy of the trust
along because your lawyer is going to want
to look at it either way when determining.
When you tell them the facts of this situation
try to figure out the best way to go about
seeing what this trustee is up to because
as Matt mentioned and what you are mentioning,
it sounds suspicious so definitely you want
to get that accounting to determine what's
going on before you'd look at any further
Yeah absolutely and that's a good point Tom
is there might be different rules depending
that live in different places so example Tom
mentioned the trust code which is Wisconsin
law that has some rules for the trustee to
follow but that actual trust document might
have some additional rules for that trustee
to follow so trustee might have to be you
know, falling not only Wisconsin law, but
also the rules that that that grantor set
up in that trust so I think you're exactly
right, you know have to bring a copy of that
trust to your attorney and if you did not
receive a copy of that trust.
Again, that's something that the trustee will have to provide.
Well great thank you to the writer for that
question about trust accounting Matt thanks
for joining us you always great to be here.
Tom and thank you to the viewers for watching
and we'll see you next time.
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