As a beneficiary of an Ohio trust, you have important rights protected by law. The trustee of an Ohio trust is a fiduciary charged with the responsibility of protecting and honoring those rights.
What is a Beneficiary?
A beneficiary is a person that has a present or future beneficial interest in a trust, whether vested now or upon on the occurrence of a future event. A beneficiary also includes persons with a power of appointment over trust property and charitable organizations that are expressly designated in the terms of the trust to receive distributions. See O.R.C. § 5801.01(C).
What is the Difference Between a Beneficiary and a Current Beneficiary?
While the term beneficiary includes those persons even with a future interest in a trust, a current beneficiary is a beneficiary that, on the date the beneficiary’s qualification is determined, possesses a present right to distributions from a trust, whether mandatory or permissive. See O.R.C. § 5801.01(F)
A Beneficiary’s Rights
The Trustee has a fundamental and statutory duty to keep the current beneficiaries of a trust reasonably informed about both the administration of the trust and any facts necessary for them to protect their interests. If you are a beneficiary of an Ohio trust, you have the following “information” rights under O.R.C. § 5808.13:
- In general, the trustee must promptly respond to a beneficiary’s request for information related to the administration of the trust.
- If a beneficiary requests a copy of the trust, the trustee must promptly respond. Note, however, that unless a beneficiary requests the entire trust instrument, the trustee may redact the trust and include only those provisions the trustee deems relevant to the beneficiary’s interest in the trust.
- If a trustmaker of a revocable trust that has become irrevocable has completely restated or amended the terms of the trust, a beneficiary can obtain the original trust instrument and any previous restatements or amendments prior to the last iteration of the trust through a judicial proceeding.
- Within 60 days after accepting the position of trustee, the trustee must notify the current beneficiaries of the acceptance and of trustee’s name, address and telephone number.
- Within 60 days after the date the trustee learns of the creation of an irrevocable trust, or the date the trustee acquires knowledge that a formerly revocable trust has become irrevocable, whether by the death of the trustmaker or otherwise, the trustee must notify the current beneficiaries of: 1) the trusts existence; 2) the identity of the trustmaker(s); 3) the right to request a copy of the trust; and 4) the right to a trustee’s report (generally, an annual report of the trust property, liabilities, receipts and disbursements).
- The trustee must notify the current beneficiaries in advance of any change in the method or rate of the trustee’s compensation.
- The trustee shall send, at least annually, a trustee’s report to all current beneficiaries and to those beneficiaries who request it. The trustee’s report must also include the source and amount of the trustee’s compensation. This duty extends to the trustee even if the trustee resigns, unless a co-trustee remains or a successor trustee is appointed and accepts the position.
- A beneficiary can waive the right to a trustee’s report or other information the trustee is required to furnish. A beneficiary can withdraw a waiver previously given.
In addition to the above information rights, the trustee owes the following duties to a beneficiary:
- The duty to administer the trust in good faith. O.R.C. § 5808.01
- The duty to administer the trust solely in the interest of the beneficiaries, not of the trustee or other person or entity that is not a beneficiary. O.R.C. § 5808.02
- The duty to act impartially among two or more beneficiaries in investing, managing and distributing trust property, giving due regard to the beneficiaries’ respective interests. O.R.C. § 5808.03
- The duty to invest trust assets prudently, according to the Ohio Uniform Prudent Investor Act. O.R.C. §§ 5808.04 and 5809.02
- The duty to incur only those costs that are appropriate and reasonable with respect to trust assets, the purpose of the trust, and the skills of the trustee. O.R.C. § 5808.05
This information contained herein is exclusively for informational purposes. It is not legal or other professional advice and does not necessarily represent the opinion of Gudorf Law Group, LLC or its clients. Using this information does not create an attorney-client relationship between you and Gudorf Law Group, LLC. Readers should not act, or decline to act, based on this information without first consulting an experienced Ohio trust attorney or other appropriate professional.