The Elder and Disability Law Firm, APC
How to decide when to tell children about a trust
Parents or grandparents in California and throughout the country generally must tell beneficiaries that they are included in a trust. However, there is no clear guideline as to when they must tell their children or grandchildren about their inheritance. As a general rule, a beneficiary must be given an annual statement by the time he or she reaches age 25. These updates are necessary to ensure that beneficiaries can protect their own interests.
However, withholding information about a trust could also be perceived as being in the beneficiary's best interest. Withholding information about an inheritance could be a way for parents to prevent their children from growing up with a sense of entitlement. In some cases, another party could be designated to receive information on behalf of a child beneficiary. At a minimum, it is important that there is adequate trustee oversight at all times.
It is also important that there is communication between the trustee and the beneficiary or representative of the beneficiary. This may help ensure that the trustee is acting in a manner that meets that person's best interests. Good communication between the trustee and beneficiary can be even more important if the trustee has some say over how and when distributions from the trust are made.
Generally speaking, a trust must be structured in a way that meets the best interests of its beneficiaries. Therefore, even if a child or grandchild doesn't know about it, a trustee must act in a manner consistent with being a fiduciary. Attorneys or estate planning professionals may help create trusts that meet the needs of both their clients and their relatives. In some cases, these professionals may recommend where to create the document to obtain the most favorable treatment for a silent trust.