Can Beneficiary of Irrevocable Trust Ask for Trust Accounting?

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

checking account.

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

done, right.

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

Trust Code.

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

steps.

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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Transcript and captions provided for ease of access for the hearing impaired.

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