Q: Is it actionable for a trustee to withhold promised distributions unless a beneficiary stops exercising their rights?
Is it legal, ethical, or actionable for a trustee to withhold distributions that they previously promised to send for the beneficiary's health, education, maintenance, and support until the beneficiary sends all their family's receipts, bank, credit card, and student loan statements for months on end, and essentially agrees to not take the trustee to court for refusing to provide a trust accounting and other issues? Let's say the trust document says the trustee may make distributions for the beneficiaries health and maintenance in general comfort taking into account what they know about their current income and readily marketable assets. Is demanding all that extra documentation, for the first time ever, as an intimidation tactic and perhaps to try to get dirt on the beneficiary to spin in court, some kind of abuse of power/rights under color of law or office? This is in Illinois.
A: If the trust gives the trustee discretion to make distributions to a beneficiary based on a particular standard, the trustee is permitted to ask for evidence from the beneficiary in order to evaluate whether a distribution should be made. This is not illegal, and is often a common feature of trusts. On the other hand, the trustee always has the obligation to act in "good faith" when administering a trust for the benefit of beneficiaries. If the trustee is asking for documentation with the goal of harming the beneficiary rather than for the purpose of following the trust's intent, then that could be considered a violation of the trustee's fiduciary duty, which would subject the trustee to being removed from their office. However, this would be difficult to prove and would require significant evidence regarding the trustee's primary motivation.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.