Keeping Beneficiaries Informed: Best Communication Practices for Trustees and Executors

One of the most common sources of conflict in trust administration isn’t money — it’s communication. Even when a trustee is handling assets perfectly, beneficiaries may grow anxious, frustrated, or suspicious if they don’t know what’s going on.

Good communication isn’t just a courtesy. In many states, trustees have a legal duty to keep beneficiaries reasonably informed about the trust and its administration. Clear, consistent communication builds trust, reduces misunderstandings, and helps prevent disputes before they start.

This guide explains why communication matters, what information beneficiaries should receive, and practical tips for keeping everyone in the loop.

1. Understanding the Trustee’s Duty to Inform

Trustees aren’t required to share every detail of daily operations, but they must provide enough information for beneficiaries to protect their interests. This usually includes account statements, updates on major transactions, and notice of significant events like property sales or changes in investments.

Failing to meet this obligation can lead to formal complaints, legal challenges, or even removal as trustee. Even if you’re not legally required to provide a certain update, doing so can often save time and stress later.

Example: Imagine a trustee sells a trust-owned property without giving beneficiaries any notice. Even if the sale was in the trust’s best interest, the lack of communication can lead to resentment and accusations of secrecy.

What to do:

• Learn your state’s specific notice requirements for trustees.

• Provide updates when key events occur.

• Document all communications for your records.

2. Choosing the Right Communication Channels

Different beneficiaries prefer different methods of communication. Some like email for its convenience and record-keeping; others prefer phone calls or even in-person meetings for important discussions. Choosing the wrong channel can make communication less effective and more frustrating.

Example: Suppose a trustee sends all updates by email, but one beneficiary rarely checks their inbox. Important information goes unnoticed, leading to unnecessary confusion.

What to do:

• Ask beneficiaries how they prefer to receive updates.

• Use written communication for formal notices to create a paper trail.

• For sensitive issues, consider a phone call or meeting in addition to written notice.

3. Setting a Regular Update Schedule

Without a set schedule, communication can become inconsistent or reactive — only happening when beneficiaries ask questions. This can feel disorganized and unprofessional. Establishing a predictable routine keeps everyone on the same page.

Example: A trustee decides to send quarterly updates summarizing the trust’s finances, recent actions taken, and upcoming plans. Beneficiaries know exactly when to expect information, reducing the number of surprise inquiries.

What to do:

• Choose a realistic frequency for updates (monthly, quarterly, or biannually).

• Send updates on the same day each cycle for predictability.

• Include both financial and non-financial developments.

4. Being Clear and Transparent

Beneficiaries may not be familiar with legal or financial jargon. Using overly technical language can confuse rather than clarify. Transparency means explaining not just what you’re doing, but why.

Example: Instead of saying “Funds were allocated to a diversified portfolio pursuant to fiduciary guidelines,” a trustee could say, “We moved some of the trust’s funds into a mix of investments to reduce risk and protect the trust’s value over time.”

What to do:

• Use plain language whenever possible.

• Provide explanations for your decisions.

• Avoid surprises by explaining major changes in advance.

5. Handling Difficult News

Sometimes you’ll have to deliver information that beneficiaries won’t be happy about — like market losses, delays in distribution, or unexpected expenses. Avoiding or sugarcoating the news can backfire if they find out later.

Example: Imagine a trustee notices a drop in the trust’s investment portfolio but says nothing. When beneficiaries eventually see the account statement, they’re more upset about the lack of communication than the loss itself.

What to do:

• Share bad news promptly, with context and next steps.

• Be prepared to answer questions honestly.

• Provide a plan for addressing the issue.

6. Respecting Privacy and Boundaries

While beneficiaries are entitled to certain information, they don’t need — and shouldn’t have — unrestricted access to every detail. Some documents may be confidential or irrelevant to their interests. Striking the right balance between transparency and privacy protects everyone involved.

Example: A beneficiary demands to see the personal financial records of another beneficiary. A prudent trustee explains that this information is private and not related to the trust’s administration.

What to do:

• Know which records beneficiaries are entitled to see.

• Politely decline requests that go beyond those rights.

• Keep all beneficiary information confidential.

7. Documenting Every Interaction

Clear records of what was said, when, and to whom can protect you if disputes arise later. This includes saving emails, keeping notes from phone calls, and storing copies of letters.

Example: Suppose a beneficiary claims they never received notice of a property sale. Having a saved email with a delivery receipt can quickly resolve the dispute.

What to do:

• Keep a communication log with dates, topics, and participants.

• Save copies of all written communications.

• Summarize important phone calls in writing afterward.

8. Being Proactive, Not Reactive

The best trustees don’t wait for questions — they anticipate them. By thinking ahead about what beneficiaries will want to know, you can address concerns before they turn into complaints.

Example: Before selling a trust-owned asset, a trustee sends an update explaining the reasons for the sale, the expected timeline, and how the proceeds will be used. Beneficiaries feel informed and included, even if they have no decision-making role.

What to do:

• Look ahead at upcoming events or decisions.

• Communicate before changes happen, not after.

• Make updates part of your standard process, not an afterthought.

Final Thoughts

Good communication is the glue that holds trust administration together. By keeping beneficiaries informed — clearly, consistently, and respectfully — you build confidence, reduce conflict, and make your own job easier.

A well-managed trust is more than just numbers in a ledger; it’s also about relationships. Keeping those relationships healthy starts with how you communicate.