The children of the late music icon Tony Bennett are currently embroiled in a legal dispute over the management of his estate. Bennett's daughters, Johanna and Antonia Bennett, have filed a lawsuit against their brother Danny Bennett, the sole Trustee of their father’s family trust. They allege that Danny has mishandled the trust, failed to provide necessary information about the trust's assets, and obtained personal benefits from his role as Trustee. The daughters are concerned about how their father's assets were managed and distributed, particularly transactions involving the family trust and Benedetto Arts, LLC. This situation brings to light important aspects of Trustee fiduciary duties and beneficiaries' rights. Although Bennett lived in New York, let’s take a look at what a Trustee’s role and responsibilities are in California.
Fiduciary Duties and Overstepping Boundaries
A Trustee has a significant responsibility when managing a trust. Their primary duty is to act in the best interests of the beneficiaries. This involves handling the trust's assets responsibly, providing an accurate accounting, and ensuring fair distribution according to the trust's terms.
In California, a Trustee's fiduciary duties include:
Duty of Loyalty: The Trustee must act solely in the interest of the beneficiaries.
Duty of Prudence: The Trustee must manage the trust assets with care and diligence.
Duty of Impartiality: The Trustee must treat all beneficiaries fairly.
Duty to Inform and Account: The Trustee must keep beneficiaries reasonably informed about the trust and its administration and provide a “formal” accounting (as proscribed in the California Probate Code) to all trust beneficiaries within one year of the trust Grantor’s date of death.
Johanna and Antonia claim Danny has failed in his duty to inform and account, as he has not provided sufficient information about the trust’s assets. They also allege that Danny has used his position for personal gain, which would be a violation of the duty of loyalty.
Beneficiaries' Rights in California
Under California law, beneficiaries have specific rights, including:
Right to Information: Beneficiaries are entitled to receive information about the trust and its administration.
Right to Accounting: Beneficiaries are entitled to a detailed accounting of the trust assets.
Right to Fair Treatment: Beneficiaries should be treated impartially and fairly.
The lawsuit here highlights that Johanna and Antonia have made multiple requests for information about the family trust but have received inadequate responses. They are seeking detailed accounts of the financial activities related to the trust and Benedetto Arts, LLC, as well as an inventory of their father's personal property.
Deadlines for Disclosing Information and Distributing Assets
California law sets specific timelines for Trustees to disclose information and distribute assets:
Initial Notice: Within 60 days of becoming a Trustee, the Trustee must notify the beneficiaries of the Grantor’s death and the existence of the trust. There is a formal notice that is laid out in the California Probate Code.
Annual Accounting: Trustees must provide an annual accounting of the trust's administration to the beneficiaries.
Distribution of Assets: The Trustee should distribute the trust assets in a timely manner according to the trust's terms, typically within one year of the trustor's death, plus or minus a few months depending upon complexity, taxes and other administrative hurdles.
What to Do If a Trustee Fails Their Duties
If beneficiaries believe a Trustee is not fulfilling their duties, they can take legal action. This might include:
Requesting a Court Order: Beneficiaries can ask the court to order the Trustee to provide information or accountings.
Seeking Removal of the Trustee: If the Trustee has breached their duties, beneficiaries can petition the court to remove the Trustee and appoint a new one.
Demanding Compensation: Beneficiaries can seek compensation for losses caused by the Trustee's misconduct.
Trying to avoid litigation is critical as it takes time and takes money out of the estate. Legal battles can drag on for months or even years, causing unnecessary stress and delaying the distribution of assets to beneficiaries. The costs associated with litigation, including attorney fees, court costs, and other expenses, can substantially reduce the estate’s value, leaving less for the intended heirs. By steering clear of litigation, families can preserve the estate’s assets, ensure a smoother and quicker administration process, and maintain harmony during a challenging time.
The dispute within Tony Bennett’s family underscores the importance of understanding Trustee fiduciary duties and beneficiaries' rights. Trustees must manage the trust responsibly and transparently, while beneficiaries have the right to be informed and to receive fair treatment. If these duties are not met, beneficiaries have legal avenues to protect their interests and ensure proper management of the trust.
To avoid litigation or family feuds, it’s ideal to hire a qualified trust and estate attorney to handle the trust administration. An experienced attorney can help ensure that all fiduciary duties, responsibilities, and deadlines are properly followed, providing clear guidance and preventing misunderstandings and mistakes. Trust administration is complex, and trying to handle it alone can lead to costly errors and disputes. Engaging a legal professional helps maintain transparency and fairness, protecting both the Trustee and the beneficiaries.
If you, a friend, or family member need help establishing or updating an estate plan or with trust administration, please reach out to our Intake Department at 760-448-2220 or at https://www.geigerlawoffice.com/contact.cfm. We have offices in San Diego County (Carlsbad) and Orange County (Laguna Niguel), but we assist can families throughout California as well.
