What Is a Beneficiary Letter?
A beneficiary letter is a document from a trustee to a beneficiary of a trust containing important information about the trust and the beneficiary’s inclusion, reports Nolo. Some of the information contained includes the name of the trustee and an estimation of when the assets are to be distributed.
The beneficiary letter also makes clear to the beneficiary that given the settlor’s death, the trust is now irrevocable, according to Nolo. A settlor can make changes in a trust while alive, but the trust cannot be changed upon the settlor’s death. The letter includes other important information, and when writing it, the trustee should consult specific state laws and regulations regarding this matter because they differ slightly from state to state. Some states require specific language to be included in the letter, while other states allow trustees to write the letters in their own words as long certain information is included.
Trustees should provide contact information in the letter so that beneficiaries can get in touch with them if they have any questions or concerns, states Nolo. Beneficiaries should be informed of their rights to see the trust documents; trustees can assure them that copies can be mailed if required. Beneficiaries also have the right to challenge such trusts in court, and they should be informed of this option.
