Trust Beneficiary Rights in Nebraska & Iowa

Beneficiary Rights Under the Trust Codes

Trust beneficiaries have legally enforceable rights under both the Nebraska Uniform Trust Code (Neb. Rev. Stat. §§ 30-3801 et seq.) and the Iowa Trust Code (Iowa Code ch. 633A). These rights exist to protect beneficiaries from trustee misconduct and to ensure that the trust is administered in accordance with the grantor's intent.

Understanding your rights as a beneficiary — and knowing when and how to enforce them — is important whether you are a current income beneficiary, a remainder beneficiary, or a contingent beneficiary whose interest may vest in the future.

The Right to Information

One of the most fundamental beneficiary rights is the right to be informed about the trust and its administration. Under both the Nebraska and Iowa trust codes, a trustee must:

• Notify qualified beneficiaries of the existence of the trust and the trustee's identity within a reasonable time after accepting the trusteeship or after the grantor's death
• Provide a copy of the trust document to any qualified beneficiary who requests one
• Keep beneficiaries reasonably informed about the trust and its administration
• Promptly respond to reasonable requests for information from beneficiaries

A "qualified beneficiary" under both codes includes current beneficiaries and those who would be entitled to receive distributions if the current beneficiaries' interests ended. Contingent beneficiaries whose interests are more remote may have fewer rights to information, depending on the circumstances.

The Right to Accountings

A trustee must provide beneficiaries with regular accountings of the trust's financial activity. A proper trust accounting should include:

• A list of trust assets and their values at the beginning and end of the accounting period
• All receipts (income, capital gains, and other amounts received by the trust)
• All disbursements (expenses, distributions, and other amounts paid by the trust)
• All distributions made to beneficiaries during the period
• The trustee's compensation, if any

Under the Nebraska and Iowa trust codes, a trustee must provide an accounting at least annually, upon termination of the trust, and upon a change of trustee. A beneficiary may also request an accounting at any time, and the trustee must provide one within a reasonable time.

The Right to Distributions

A beneficiary's right to distributions depends on the terms of the trust. For mandatory distributions — those the trustee is required to make — the beneficiary has an enforceable right to receive the distribution on the schedule specified in the trust. For discretionary distributions, the beneficiary has the right to have their request considered in good faith, but not necessarily the right to receive the distribution.

See our guide to trust distributions for a detailed explanation of how distribution decisions are made and what standards apply.

Remedies for Breach of Trustee Duties

When a trustee breaches their fiduciary duties, beneficiaries have several potential remedies under Nebraska and Iowa law:

• Compel performance: A court can order the trustee to perform a required act — such as making a mandatory distribution or providing an accounting
• Enjoin a breach: A court can prohibit the trustee from taking an action that would constitute a breach
• Surcharge: A court can require the trustee to pay damages to the trust for losses caused by the breach
• Disgorgement: A court can require the trustee to return any profit made from a breach of the duty of loyalty
• Removal: A court can remove the trustee and appoint a successor
• Void transactions: A court can void transactions entered into in breach of the duty of loyalty

The appropriate remedy depends on the nature and severity of the breach. An attorney can help you evaluate your options and pursue the most effective course of action.

Frequently Asked Questions