We all have people and property that we want to cherish and protect, but the hard truth is, we will not always be here.
There are a lot of things that can happen, and life is simply too short. That is why legal documents like wills and trusts are created.
They ensure our intentions are followed even after we have passed, especially when ensuring that the people we love will be cared for.
Having a trust gives you a chance to designate the beneficiaries who would receive your assets upon your passing.
There are also times when we find ourselves on the receiving end of this protection as a beneficiary.
The question, though, is how to find out if you are a beneficiary of a trust. We seek to answer that question and more.
We’ll also talk about Trust and Will, an online legal service provider that can help you with your trust needs.
What Is a Trust?
To provide you with more insight and understanding, particularly later on as we go through the most frequently asked questions concerning trusts, let’s clearly define what a trust is first.
In the simplest terms, a trust is a fiduciary relationship between a settlor (also referred to as a trustor) and a trustee.
The settlor is the individual who had the trust created. On the other hand, the trustee is the entity in charge of managing the assets stated in the trust.
They’re also responsible for distributing the assets to the named beneficiaries.
The beneficiary is the person or organization that then receives these assets when the time comes.
A trust also involves creating a legal document that states when and how these assets are going to be distributed.
Trust vs. Will
There’s probably another legal document that comes to mind when talking about trusts: the last will.
After all, they tend to serve the similar purpose of ensuring that your loved ones inherit the assets you will leave to them.
However, there are a few noteworthy differences. For one, a trust protects the assets from being taxed.
It also keeps them safe in case there are changes in family ties, such as if you suddenly get divorced. Trusts are also more complicated to revoke.
For these reasons, trusts are also more costly to have made and maintain than a will.
Different Types of Trusts
If you plan to create a trust or you’re a beneficiary, you must know and understand its different types.
Main Types
There are different kinds of trusts, but they are generally categorized into two: revocable and irrevocable.
As their names suggest, a revocable trust can be amended or canceled as long as the settlor is still alive and of a sound mind to perform these changes.
On the other hand, an irrevocable trust cannot be revoked or changed after it has been established, and more definitely, after the settlor has passed.
You might be wondering “Does a irrevocable trust need to be recorded? If so, where are trusts recorded?”
You have to understand that trusts are very private documents, so they’re probably not recorded anywhere.
Other Types
There are also other types of trusts beyond the two main categories. Here they are:
- Living Trust
This document states how an individual’s assets are going to be used during their lifetime.
Whatever is left behind can then be transferred to their beneficiaries after they passed away.
This type of trust is revocable as long as the settlor is alive and of a sound mind.
- Testamentary Trust
If a trust only states how the assets of a settlor will be distributed among the beneficiaries, which also means that they will not spend these assets while they’re still living, this is called a testamentary trust. This type of trust is irrevocable.
- Funded Trust
If the trust already has assets put into it, then it is called a funded trust.
- Unfunded Trust
On the other hand, an unfunded trust only gets funded after the settlor has passed away.
There are also cases when it remains unfunded. This is not ideal, though, since it will expose your assets to the risks that having a trust could prevent in the first place, such as taxes and other fees.
- Shared Trust
Finally, you also have the option to share a trust with your spouse. This is referred to as a shared trust.
Are Beneficiaries Named in a Trust?
Yes, beneficiaries are named in a trust. They could be individuals, organizations, or charitable institutions.
Depending on the type of trust that the settlor has created, the designated beneficiaries can still be changed while the settlor or settlors are still alive.
In the case of a shared trust, it could be stated that the assets can be transferred to the living spouse after the first one has passed away.
The assets will only be distributed after the remaining settlor has also died.
The settlors also have the option to distribute their assets separately.
This means that each settlor in the shared trust will name separate beneficiaries that can receive the assets should one of them die.
An alternate beneficiary can also be named if the original beneficiary refuses or cannot receive the assets.
Who Is Considered a Beneficiary of a Trust?
The person or organization designated to receive the assets is the beneficiary of a trust.
It can be a surviving spouse, child, friend, or even a charitable institution, as mentioned above.
Though, certain states grant a spouse or a child the right to claim some of your trust assets.
Hence, if you don’t want to leave anything to your spouse or registered domestic partner, or if you want to disinherit a child, then we strongly suggest for you to consult a lawyer before finalizing anything.
How to Find Out if You Are a Beneficiary of a Trust
The question that we really want to address is how to find out if you are a beneficiary of a trust. There are two ways.
First, you can simply ask the settlor while they’re still alive. If not, then you can contact the trustee to provide you with that information.
A trustee can provide a list of beneficiaries unless otherwise indicated.
Does a Beneficiary Have a Right to See the Trust?
Yes, a beneficiary has the right to access this information. The lawyer and accountant of the settlor also have the same access.
Some states also allow heirs to know the beneficiaries of a trust even if they were not named among them.
Previous beneficiaries can also be allowed to know this information even if they were already removed.
In any case, rest assured that a trustee is required by law to notify all beneficiaries within 60 days of the settlor’s passing.
If the trustee has failed to notify you within this time period or believe that the information provided to you is inaccurate or incomplete, contact a lawyer immediately.
One usually has only 120 days to contest a trust upon the passing of the settlor or the trustee’s date of notification.
Are Trusts Public Record?
Wills that have been filed in court are public records, but trusts are not.
As we mentioned when we answered “Does a irrevocable trust need to be recorded?“, trusts are private documents that are inaccessible for as long as they are still revocable.
You can simply request for a copy of the trust from the trustee after the settlor’s passing.
That is especially if you have been named or previously named as a beneficiary.
If the settlor is still alive, they can voluntarily provide you with that information, but that is their choice.
It is a settlor’s right to refuse. You can’t force them to divulge any information that they don’t want to.
The Trust and Will Company
Those who want to have a trust, a will, or any related legal document can already do so online through companies like Trust and Will.
We really appreciate the convenience of these platforms and the more affordable costs they provide compared to offline methods.
They are also a good source of information if you have other queries that we have failed to address.
How Do You know if You Are a Beneficiary: A Summary
Beneficiaries will then be informed within two months of the settlor’s death.
One can also inquire from the trustee whether they are a beneficiary or not. If you are named as one, then know that you have the right to access any information related to the assets that you will receive.
If the trustee has failed to notify you or suspect that the trustee has provided you with inaccurate or incomplete information, please seek legal assistance immediately.
If you ever find yourself in doubt, asking “Does a beneficiary have a right to see the trust?”, then allow us to answer that. Yes, you do.
Meanwhile, those wondering “Where are trusts recorded?” must remember that they are private documents, so they are not on public records.
Those who need further information can always seek online legal service providers like Trust and Will.
Good luck!