I’m not asking for legal advice here, as I am sure individual cases vary immensely. I am looking for opinions and experiences from others who have been through this.
A family member dies, leaving a Living Trust with other family members as beneficiaries. One of the beneficiaries is also the Trustee (I wonder if this is a conflict of interest, but maybe that’s for another thread). The other beneficiaries receive copies of the Will and other documents, including a form they are asked to sign and return called a “Waiver of Accounting.” I believe this means that the Trustee and/or attorneys handling the estate do not have to provide an inventory or value of assets at the time of death to the other beneficiaries or a list of what bills, medical costs, etc. were paid out of the trust after that.
When asked why the beneficiaries should waive the right to such accounting, the attorneys respond that this causes big delays and many more legal fees taken out of the trust before it is distributed.
So it’s just a good faith deal? Presumably the Trustee has to do an inventory of the assets and get appraisals on property, etc. anyway. Why would it increase attorney fees to provide this information to the beneficiaries?
Let’s say theoretically the Living Trust was set up in Florida and the beneficiaries (other than the Trustee) all live in other states.
What happens if you don’t sign it?
If any of the beneficiaries don’t sign the waiver then they can force an accounting of the assets. The lawyers say this will cause delays and a lot of expense and that the beneficiaries will have to pay more out of the estate for this. I don’t see exactly what extra work has to be done. I assume that some kind of initial accounting of the assets has to be done, anyway.
I’m not a lawyer, and I don’t know anything.
That said, if you DON’T do an accounting, how would you have any idea that the trustee isn’t going to take more than their fair share? Like you said, it is a clear conflict of interest. And it really doesn’t matter how well you think you know someone. Anyone* could *screw over their cousin or brother, if the price was right. No matter how well you think you know someone. In my family, people who I’d previously thought well of turned into downright thieves after the death of my grandparents. I ended up with a miniature empty bottle of Tabasco sauce to remember my grandpa by, while other family members ganked entire bedroom sets before their bodies were even in the ground. Moneylust does nasty stuff to some people, and you just never know.
But, you know. Talk to the other beneficiaries and see what they think. Because it doesn’t matter whether *just you *want to do an accounting or not. It matters if all of you agree. If just one person wants an accounting, then it’s going to be done. So if it turns out that someone already plans to request it, then you don’t have to agonize about it.
I handled my uncle’s estate, though there wasn’t anything complex like a trust – not even a will for that matter.
These laws vary pretty widely from state to state, but my lawyer (in IL) told me that the court required an inventory of major assets – cash, bank accounts, house, car, etc. It is possible there is a requirement that a more extensive inventory might be required for a trust, but I dunno – after family members and I wen’t through his home, we just paid a service to clean and empty it out, and if they found anything valuable, we never knew. It was not considered a conflict for me to administer the estate, although I was also a beneficiary, though other beneficiaries did have a right to object to it if they wanted.
Another thing is that it sounds to me as if the trustee is not going to do any of the work, which would substantially reduce the costs of such an inventory. So if the law firm iis going to pay a paralegal to sit in a house for days and days and count every piece of silverware and take extensive notes on everything, that could certainly add up to some pretty big bucks. OTOH, if the trustee did the same, the trustee would have the right to bill the estate for a reasonable fee for performing that service too.
I think it does boil down to a matter of trust. If you think the estate is small (I would call small less than half a million dollars if it includes a house), maybe an accounting isn’t worth the chunk of money it would cost. IMO, the larger you think the estate is, the more you should insist on an accurate inventory.