Trustees Should Always Answer Accounting Questions From Beneficiaries

Attorney L. Reed Bloodworth is Founder and CEO of Bloodworth Law with offices in Orlando and Winter Haven, Florida.

Reed handles trustee defense and said that a lack of communication, specifically about accounting, causes disputes between trustees and beneficiaries.

Trustees Should Always Answer Accounting Questions From Beneficiaries

Reed said that in order to keep the peace and keep relationships strong that trustees should always answer accounting questions from beneficiaries.

“All beneficiaries want to know the status of the assets,” said Reed a 2022 U.S. News & World Report Best Lawyer in Trusts and Estates Litigation. “So when they ask trustees questions like:

• How much money is there?
• Where’s the money?
• How’s the money being kept?
• How are the investments?

“…I think that trustees should always answer. I believe that communication and updates can maintain strong relationships with beneficiaries and prevent many disputes.”

Reed explained, “you don’t want to just say, ‘here’s your annual trust accounting,’ and leave it at that. Details and consistency are important.”

One Annual Trust Accounting Required

“Florida trustees are required to provide one annual trust accounting, while corporate trustees send monthly asset reports to beneficiaries and that’s something that is very wise,” Reed said.  “It’s proactive, and it’s the type of communication and information I think beneficiaries really appreciate.

“But, when you have an individual trustee, they may not be equipped to do that additional accounting,” he said. “It’s something a large trust company can do. They have all their portfolios set up and it’s easy for them to print and mail or email monthly updates.

Answering Questions Eliminates Doubt, Problems

“An individual trustee may not be able to send them a monthly update,” Reed said. “But what they can do is this: whenever there is a question by a beneficiary, they should answer it. Answering all questions alleviates doubt and problems. Respond in a timely manner, politely, when beneficiaries ask.

Be Open To Offering Updates When Asked

“Additional updates inform the beneficiaries and make them aware of what’s happening,” Reed said. “Because that’s when people start to worry, when they don’t hear from their trustee, or when their trustee doesn’t respond to calls or emails.

“I think that’s probably the number one thing that can get a trustee into a legal situation is failure to communicate.

Ongoing Communication May Avoid Litigation

“If ongoing communication with a beneficiary will avoid litigation, then do it,” Reed said. “Overcommunicate and share information. If this still doesn’t help, then it’s time to talk with an attorney.”

A beneficiary and a trustee may be able to address many questions or problems this way. But if a disagreement can’t be worked out, a beneficiary may file a complaint against the trustee.

If you’re a trustee having trouble working things out with beneficiaries over a trust, talk with Attorney Reed Bloodworth about whether Bloodworth Law can help you, your family, or your business.