Can a California trustee require a beneficiary to sign a release in order to get a distribution from a trust? A question like this appeared recently on the AVVO “Free Q&A” page and makes for a perfect blog topic.
Trustees understandably want to wrap up trust administration without having to worry about being sued by beneficiaries. When a beneficiary appears to be litigious, the trustee may want to dangle a preliminary or final asset distribution as a carrot to get the beneficiary to sign a release. Yet, since the trustee is a fiduciary, California law does not give a trustee unfettered discretion to insist on releases. An effort to prevent trust litigation could end up sparking such litigation.