Many people assume that beneficiaries (those designated to inherit from the estate of the will or trusts of the decedent) have no rights aside from the right to receive their inheritance. This is a misconception. Beneficiaries do have rights, including the right to be kept informed by the executor (the person or entity designated by the decedent to carry out the instructions of the will) about the amount of assets held by the estate, the amount of debt the estate owes, and which assets are being used or sold to clear that debt. The beneficiary also has the right to receive a copy of the will. This means that a beneficiary has a right to know the approximate amount he or she is likely to receive after the will is probated. The beneficiary does not, however, have the right to view or receive the inheritance until probate is completed.
When dealing with the complexities of estate planning, whether you are the testator or the beneficiary, it is wise to have a skilled estate planning attorney to guide you. At E.A. Goodman, we are committed to providing you with personal, professional attention and dedicated to protecting your interests above all else. We are beneficiary rights advocates with a track record of success in making sure our clients inherit every dollar they are entitled to.
In addition to having the right to be informed that one is a beneficiary to an estate and of the approximate amount to be received, the beneficiary also has the right to:
- Have the Executor Exercise “Reasonable Diligence” in Administering the Estate
This basically means that the executor is responsible for successfully transferring ownership of inheritance to the designated beneficiaries within a year after the decedent’s death, or to show cause for the delay. In cases in which the executor seems to be procrastinating for no good reason, the beneficiaries may petition the court to appoint a new, more effective executor.
- Be Made Aware of the Process of Abatement
Abatement is the process through which an estate’s assets are spent or sold to cover the estate’s outstanding liabilities. Because creditors must be paid off first, each beneficiary’s inheritance may be lessened by the amount of debt the decedent was carrying. Even if this is the case, you are entitled to your proportion of the remaining estate. Suppose, for example, you were supposed to inherit one-fifth of a $1 million estate ($200,000). If the estate decreases to half of its original value once its sizeable debts have been paid off, you will still inherit one-fifth of the new total amount ($500,000), in this case $100,000. If the estate was not solvent, it is also possible that you will lose all of your inheritance during the debt-clearing process.
Rights of Trust Beneficiaries in New Jersey
In many cases, savvy estate planning attorneys may have helped the settlor (grantor) to create trusts for his/her beneficiaries in order to avoid probate and excessive taxation. In such cases, beneficiary rights are typically spelled out in the document itself.
If the trust was established as a revocable trust, a trust that can be changed or revoked by the trustor at any time, the trust beneficiary doesn’t have any significant rights. This is because the trustor has the freedom to change the trust at any time and possibly change the beneficiary.
The beneficiary of an irrevocable trust, however, which a revocable trust will become when the trustor dies, cannot be changed except by a rarely supplied court order. For this reason, beneficiaries of an irrevocable trust do have the right to receive information about the trust and to make certain that the trustee (the person managing the trust) is behaving ethically and responsibly.
Common Rights of Current Beneficiaries of Trusts
Current trust beneficiaries are already receiving distributions established in the trust document. These beneficiaries, therefore, already have certain rights, including:
- Distributions as established in the trust document
- Right to information in order to understand how to enforce their rights
- Right to accounting — a detailed report of income, expenses, and distributions of the trust
- Right to remove the trustee if he/she has been found to be acting against the beneficiary’s best interests
It is even possible that a current beneficiary may be able to end the trust entirely, as long as all current and remainder beneficiaries agree. This happens only if the trust has completed its purpose or if fulfilling its purpose is determined to be impossible. In order to end the trust, the court must be petitioned by the concerned parties.
Ensure Your Inheritance in New Jersey
Whether you know you are going to be receiving an inheritance because you are already receiving funds from an established trust, or someone close to you has died and you suspect you may be a beneficiary, you would be wise to contact E.A. Goodman, LLC in Cedar Knolls. We have experienced beneficiary rights attorneys who will be able to help you navigate the legal pathways necessary to get you to your destination. We are trustworthy and highly knowledgeable in all areas of estate planning law. You can reach us by filling out a contact form on our website, by calling us, or by sending us an email.