In the law of trusts, basic transparency isn't optional; it’s foundational. Despite some trust instruments attempting to restrict beneficiary access to information, the fiduciary duties of a trustee make clear that a trustee cannot prevent a qualified beneficiary from protecting their interest in the trust or evading core fiduciary obligations. The trust law affirms that trustees have a duty to keep beneficiaries reasonably informed and to furnish material information necessary to protect their interests.
Crucially, this duty cannot be wholly eliminated by trust language, especially after the settlor’s death when the trust becomes irrevocable and a qualified beneficiary’s interests become fully vested. Core trust law principles provide that a beneficiary is entitled to request such information as is reasonably necessary to enable the beneficiary to prevent or redress a breach of trust. This principle underscores that core disclosure duties serve not just individual beneficiaries but also the integrity of the trust relationship itself.
The common law of trusts has long echoed this policy. The trustee's fiduciary duty encompasses providing material information to a trust beneficiary. A trustee's arbitrary or capricious application of trust provisions to limit access to key financial information required to protect a beneficiary’s interests risks a breach of the trustee's fiduciary duties. The takeaway for trustees and drafters: fiduciary duties are not entirely waivable, and a trustee, particularly if also a beneficiary, must act with impartiality and transparency.