As a general rule, a trustee is obligated to communicate information about a trust to beneficiaries. However, some Florida residents and others may find that talking about a trust doesn’t fit their estate planning needs. For instance, a parent may feel as if a child will develop poor personal or professional habits if he or she knew about a large future inheritance. Parents may also worry that their children will be the target of lawsuits if anyone knew about the trust.
While silent trusts are permissible, there may be limitations as to how far a trustee can go to withhold information from beneficiaries. For instance, the trustee may be required to provide a copy of the trust upon request, and it is possible that a silent trust could prohibit that as well. The trustee could also be prohibited from talking to anyone other than a designated individual acting on behalf of a beneficiary.
Typically, the trustee is only obligated to reveal information to a qualified beneficiary. This is someone who is entitled to distributions from the trust, and it eliminates the need for a trustee to divulge information to a contingent beneficiary. Generally speaking, the period of silence ends when a beneficiary reaches age 25 if the trust is developed under terms of the Uniform Trust Code.
The use of silent or other trusts may help a family pass assets in a private and orderly fashion. It may also provide asset protection against creditor lawsuits or other legal action. Individuals who already have a trust might benefit from reviewing it with an attorney as needed. This may be ideal after a major life event such as a divorce or death in the family. In some cases, an attorney may be able to serve as the trustee.