One of the most common calls we receive starts the same way: “My parent died a year ago, my sibling is the trustee, and nobody will tell me anything.” Beneficiaries are often unsure whether they are entitled to see the trust, the account statements, or anything at all. In Colorado, trustees owe beneficiaries enforceable duties of transparency, and silence is not an acceptable way to run a trust.
What the Law Requires
Under C.R.S. § 15-5-813(1), a trustee must keep qualified beneficiaries reasonably informed about the trust’s administration and the material facts they need to protect their interests. A trustee must also respond promptly to a qualified beneficiary’s request for information unless the request is unreasonable under the circumstances.
The trust’s terms can modify some disclosure requirements, but they cannot eliminate a qualified beneficiary’s right to obtain trustee reports and other information reasonably related to the administration of an irrevocable trust in response to a reasonable request. The statute adds specific obligations. On request, the trustee must promptly provide the portions of the trust instrument that describe or affect the beneficiary’s interest.
Within 60 days after accepting a trusteeship, the trustee must notify qualified beneficiaries of the acceptance and provide the trustee’s name, address, and telephone number. A separate 60-day period begins when the trustee learns that an irrevocable trust has been created or that a formerly revocable trust has become irrevocable. That notice must identify the trust’s existence and its settlor or settlors and explain the rights to request relevant trust provisions and receive a trustee’s report. The trustee must give advance notice of any change in how the trustee is paid. And current beneficiaries are entitled to a report at least annually listing assets, liabilities, receipts, disbursements, and the trustee’s compensation. The 60-day notice requirement does not apply to a trustee who accepted the trusteeship before January 1, 2019, an irrevocable trust created before that date, or a revocable trust that became irrevocable before that date. This exception does not eliminate the other disclosure duties.
Who Is Entitled to Information
These rights belong to “qualified beneficiaries,” which generally means beneficiaries who may currently receive distributions and those next in line if the current interests ended. A remote contingent beneficiary may not have the same rights. A qualified beneficiary may waive reports or other required information and may later withdraw that waiver as to future reports and information. If the trustee relies on a waiver, ask for its terms and supporting documentation.
How to Ask Effectively
Start with a written request sent in a way that proves delivery. Ask specifically for the relevant portions of the trust, a current list of assets and values, account statements for a defined period, and the trustee’s most recent report. Keep the tone professional. A clear record of a reasonable request and an unreasonable response is valuable if the matter reaches court.
Read what you receive carefully. A trustee’s report can start a shortened deadline for bringing claims, so information you receive may also be time-sensitive.
When the Trustee Won’t Respond
If requests are ignored or answered with generalities, a beneficiary can ask the court to step in. Colorado courts can order a trustee to account, surcharge the trustee for losses, reduce or deny the trustee’s compensation, and even remove the trustee under certain circumstances. A sustained refusal to provide basic information is itself a breach of duty, and it often signals other problems with the administration.
Litigation is not always needed. A letter from counsel citing the trustee’s statutory obligations often produces results. But when it does not, beneficiaries should not let months pass hoping things improve.
A Note for Trustees
Family trustees sometimes withhold information to avoid conflict, believing that saying less is safer; it is not. Prompt, complete communication reduces suspicion, can shorten the time in which claims may be brought, and demonstrates good faith if a dispute arises later.
Mahoney Law, LLC represents beneficiaries and trustees in trust disputes throughout Colorado. If you are being kept in the dark about a trust, contact our Denver office.