Two people discuss their irrevocable trust as the sun sets in the background.

What Are the Obligations of a Trustee for an Irrevocable Trust?

Your parents just told you they’ve placed their assets into an irrevocable trust, and you’re one of the trustees. But when you see the paperwork, you learn your siblings aren’t entitled to the same percentage of the assets. Should you tell them? Are you legally required to tell them? A Massachusetts Court has answered this question for you.

Siblings Not Recognized Equally in Irrevocable Trust

The case was called In the Matter of the Colecchia Family Trust, and it centered around an irrevocable trust created by the parents of petitioner, Michael Colecchia. This trust named two of his sisters as trustees as well as six beneficiaries. The three sons would receive 30% of the estate after their parents passed away, and the three daughters would receive 70%.

In the ten or so years between the creation of the irrevocable trust and the death of Colecchia’s mother in 2016, Michael claimed he’d done a good deal of maintenance and landscaping work on his parents’ property. That’s free labor he argues he wouldn’t have done if he’d known about the trust and the discrepancy in benefits.

Should the Trustees Notify Other Family Members that a Trust Exists?

Michael’s sisters knew about the irrevocable trust their parents had created, but they didn’t mention it to Michael. Should they have? While many of us would agree that in an ideal world, families would be open in their discussions of estate planning, the court found differently. The Massachusetts Court of Appeals ruled that Michael was not considered a qualified beneficiary until a qualifying event happened. In this case, the qualifying event was the death of both parents. For this reason, his sisters were not obligated to tell him about the trust until after their parents had died and he was entitled to a portion of the estate.

The court’s ruling means that, though Michael might regret doing all that work for free on his parents’ property, he can’t recover monetary damages. His sisters weren’t required to tell him, so they did nothing legally wrong by not doing so.

Involve Your Family Members in Your Estate Planning

The process of estate planning and discussing a family member’s eventual death can be uncomfortable. But family matters go more smoothly both before and after someone’s passing if they are open about their final wishes with all involved loved ones. When you’re ready to create your irrevocable trust, invite your loved ones to share in the process of creating an estate plan.

Establish Your Irrevocable Trust with DaMore Law

With years of experience in all aspects of estate law, you can trust your DaMore Law attorney to partner with you and your famliy to create the estate plan that is right for you. Contact us today for a free consultation!

Source: In the Matter of the Colecchia Family Trust, Mass. App. Ct., No. 20P224