Beneficiaries have the right to know certain information about a trust, but sometimes trustees refuse to provide it. This can lead to beneficiaries feeling upset and hiring lawyers. In some cases, the trustee may not know their responsibilities or may intentionally withhold information. This article explains what information beneficiaries can get under Florida law and how they can get tax returns from the IRS. It also discusses how a beneficiary can make a trustee give them information, even if the trust has a clause trying to stop them. The Florida Trust Code gives beneficiaries the right to access information about the trust. The trustee must keep accurate records and provide information to the beneficiaries, including notice of accepting the trust, the trust’s existence, and a copy of the trust document if requested. The trustee must also provide an annual accounting to the beneficiaries. Beneficiaries can waive the right to an accounting, but can change their mind later. Even if the trust document says the trustee doesn’t have to provide an accounting, Florida law says they still have to. The trustee of a trust has a duty to provide a clear report every year, showing all the money that came in and went out of the trust. They have to do this once the trust becomes permanent. If they don’t do it properly, they can be ordered to by a court, and they might have to give up part of their pay or even be removed as trustee. The trustee also has to file the trust’s tax returns and give the beneficiaries a form showing the trust’s income. If the trustee won’t give a beneficiary the tax returns, the beneficiary can ask the IRS for them. This law says that the IRS can show a person’s tax return to certain family members or beneficiaries if they have a good reason to see it. A tax return can include other forms with financial information too. A “material interest” means the person has a significant reason to see the information, often related to money. The IRS can give tax returns and related information to someone who has a financial interest in the estate of a deceased person. In a court case, a son was able to get his father’s trust tax returns because he was a beneficiary of the trust under state law. This shows that using the law to get tax information can be important for lawyers. In some states, if a person contests the terms of a trust or will, they might lose their right to inherit. But in Massachusetts, a court ruled that asking for an accounting of the trust is not considered a challenge. So, beneficiaries can still ask for information about the trust without losing their inheritance rights. New Hampshire also has a law that allows beneficiaries to take legal action to make sure they’re not violating the no-contest clause. In some states, like Ohio and Georgia, it’s okay for a beneficiary to ask a court to explain a will or trust without breaking the rules. New York and Texas are more strict, but Texas has some exceptions for good reasons. In Florida, a trustee has to keep beneficiaries updated, but there are ways to make them do their job if they don’t. A qualified beneficiary is someone who can receive money or property from a trust. When the person who made the trust dies, the beneficiaries have the right to get information about the trust and how it’s being managed. They can also ask for an accounting of all the money and property in the trust. If the trustee doesn’t provide this information, the beneficiaries can take legal action. When someone dies, the IRS has forms for reporting what they owned and who gets it. If you want this information, you can ask for it through the Freedom of Information Act, but there are rules you have to follow. If the IRS thinks your request is missing something, they have to tell you. You can also get some tax information without a FOIA request, like personal tax returns. The court looked at the rules for taxes to decide who should be considered a “beneficiary.” In Missouri, a beneficiary is defined as someone who will benefit from a trust now or in the future. In Florida, a rule says that no one can be punished for challenging a trust made after 1993. Only Florida has this rule, while Indiana has some exceptions. In Massachusetts, a case from 1967 set a precedent for how challenges to trusts should be handled. In Ohio, a case from 2012 showed that a beneficiary can ask a trustee to follow the rules of the trust without breaking any agreement. In Georgia, a beneficiary can ask for an account of a trust without breaking any rules. In New York, a case from 1999 said that a beneficiary can challenge a trust without losing their share. In the end, it’s important for beneficiaries to have the right to challenge a trust and protect their share of the assets. Attorneys Jason and Leah specialize in helping people with their wills, trusts, and estate planning. They also help clients manage their money and protect their assets from taxes. They work at a law firm in Boca Raton, Florida. They are experts in their field and are active members of The Florida Bar.
Source: https://www.floridabar.org/the-florida-bar-journal/the-trust-beneficiarys-right-of-access-to-information/
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