The Trustee’s Duty to Inform and Account: Why Transparency Matters in Trust Administration

After a loved one dies, families often find themselves in the dark about the contents of the trust that was supposed to carry out the decedent’s wishes. Beneficiaries may wait months for answers, wondering what assets are in the trust, how they are invested and when they will receive distributions. In some cases the trustee goes silent, whether out of inexperience, confusion or fear of making a mistake. When this happens, frustration builds and family relationships can deteriorate. But the law does not leave beneficiaries without recourse. Trustees have a legal duty to keep beneficiaries informed and to provide regular accountings of the trust’s administration. Understanding this duty helps both trustees and beneficiaries navigate one of the most sensitive aspects of trust administration.

Why Communication Is Essential

Trusts are private documents. They are not filed or recorded with any government agency, so beneficiaries cannot simply look them up in a public registry. To ensure transparency, the law imposes affirmative duties on trustees. A trustee must keep beneficiaries reasonably informed about the trust and its administration, and must provide specific information when asked. This duty exists independently of any duty to make distributions: even beneficiaries who will not receive any money for years are still entitled to know what the trust owns and how it is managed. Trustees who believe that silence will avoid conflict often find that the opposite is true; lack of communication breeds suspicion and may lead to expensive litigation.

The Duty to Inform: What Trustees Must Disclose

When a trustee accepts the role, they must promptly notify the qualified beneficiaries that they are now in charge of the trust. Beneficiaries are entitled to know the trustee’s name, address and contact information, and to request a copy of the portion of the trust instrument that describes their interest. If the trust was previously revocable and becomes irrevocable upon the settlor’s death or incapacity, the trustee must inform the beneficiaries of this change and of their right to receive information.

The duty to inform continues throughout the administration. Trustees must keep beneficiaries reasonably apprised of material facts, such as sales of trust property, significant changes in investments or major expenses. Trustees also must respond to reasonable requests for information related to the administration of the trust. If beneficiaries ask for details about a particular asset, the trustee should provide the requested information or explain why it cannot be provided. Trustees must also give advance notice if their compensation will change. In essence, the trustee cannot operate in secrecy; openness is part of their fiduciary duty.

The Duty to Account: Formal Reports and When They Are Required

Separate from the duty to inform, trustees owe beneficiaries a duty to provide formal accountings. An accounting is more than a casual update—it is a comprehensive report of the trust’s property, liabilities, receipts and disbursements over a specific period. A typical accounting includes a statement of receipts and disbursements, a listing of assets and liabilities, the trustee’s compensation, descriptions of any agents or professionals employed by the trustee and a notice to beneficiaries that they may petition a court to review the accounting. The trust document may provide additional requirements, but it cannot eliminate the beneficiary’s basic right to an accounting.

Most jurisdictions require accountings at least annually, at the termination of the trust and whenever there is a change of trustee. Annual accountings give beneficiaries a regular snapshot of the trust’s financial health, while termination accountings allow beneficiaries to verify that distributions are correct. If a trustee takes over from a predecessor, the outgoing trustee should prepare a final accounting so that everyone understands the state of the trust at the handoff. Some trusts are exempt from accounting requirements while the settlor remains alive and competent, but beneficiaries should be aware that this exemption typically ends when the trust becomes irrevocable.

Rights and Remedies for Beneficiaries

Beneficiaries who are kept in the dark should not assume that nothing can be done. If a trustee fails to provide information or an accounting when required, beneficiaries can make a written demand. If the trustee still refuses, beneficiaries may petition a probate or chancery court to compel the trustee to account and to provide information. Courts take these duties seriously, and trustees who do not comply may be ordered to produce reports, may have their fees reduced or may even be removed and surcharged for any losses resulting from their failure to communicate.

It is also important to recognize that the right to information extends beyond formal accountings. Even when an annual accounting is not yet due, beneficiaries can ask for documents or explanations that are reasonably necessary to protect their interests. For example, if a surviving spouse controls a marital trust and the children from a first marriage are waiting to inherit after the spouse’s death, the children are entitled to know what assets are in the trust and whether they are being managed prudently. If information is not forthcoming, beneficiaries can seek judicial assistance long before distributions are due.

Practical Advice for Trustees

Trustees can avoid disputes by embracing transparency from the outset. Here are some practical steps:

1. Send an introductory letter. After accepting the trusteeship, notify all beneficiaries of your role and provide contact information. Include a clear invitation for them to ask questions.

2. Provide the trust instrument. Give beneficiaries copies of the sections that describe their interests and the trustee’s powers. This helps everyone understand the rules of the trust and reduces misunderstandings.

3. Create a calendar. Note when annual accountings are due, when taxes must be filed and when key trust milestones occur. Advance planning ensures that reports go out on time.

4. Keep detailed records. Maintain a ledger of receipts, disbursements and asset valuations. Good records make it easier to produce accurate accountings and to answer beneficiary questions.

5. Respond promptly to questions. Even if you do not have an answer right away, acknowledge the request and set a timeline for responding. Silence breeds frustration.

6. Use professionals. Accountants and attorneys can prepare formal accountings and assist with complex administrative issues. Paying for professional help from the trust is often cheaper than defending a lawsuit later.

Conclusion

Serving as a trustee is a serious responsibility that goes far beyond managing investments and writing checks. Communication and transparency are at the heart of good trust administration. By keeping beneficiaries informed and providing regular accountings, trustees build trust, avoid conflict and fulfill their legal duties. Beneficiaries, in turn, should understand their rights to information and act if those rights are ignored. A well‑managed trust is not a secret—it is a collaboration between the trustee and the beneficiaries, grounded in openness and accountability.