Does a Trustee or Agent under a Power of Attorney have a Duty to Report to Heirs?

 In Durable Powers of Attorney, Revocable Trusts, Special Needs Planning

Question:

Everything about mom’s assets and estate were kept confidential, until after her passing. Can an agent under a durable power of attorney or a trustee (I’m not sure of her proper title) be held responsible for non-disclosure ? I received no Accounting as a beneficiary or heir and this has resulted in the loss of my Supplemental Security Income (SSI) and benefits and a bill for over $1,200 from the Social Security Administration (SSA).

Response:

The rules are different for agents under durable powers of attorney and trustees acting under trusts. Agents under durable powers of attorney typically have no duty to provide accountings or other information to the heirs of the person for whom they’re acting. The heirs or beneficiaries typically have no rights until the incapacitated person passes away.

If your mother had a trust, the trust document itself may or may not have created obligations for the trustee to report to beneficiaries. State trust law also may require trustees to provide accountings to beneficiaries. However, if you were not a beneficiary until after your mother passed away, then there probably were no reporting obligations during her life.

After your mother passed away, the durable power of attorney ceased to be in effect. The personal representative of her estate or the trustee of her trust then would have some duty to report to you. But nothing happens immediately or always works like a well-oiled machine. There can be situations where you may be entitled to distributions from a trust or an estate that affect your eligibility for public benefits for a period of time before you have notice of the entitlement. This may cause an overpayment. Without knowing the situation entirely, I can’t tell you whether the SSA was right or wrong in terminating your benefits and demanding a repayment.

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