Do I Need to Provide an Accounting?

As the successor trustee of a trust, you have many duties. One of them is to provide an accounting to the beneficiaries of the trust annually. If you are not sure what a trustee or beneficiary is then read this article.

Of course, there are exceptions to this rule. If the trust states that the accounting for beneficiaries is waived then it could be waived. However, I would be careful with this because there are circumstances that waiving an accounting can be considered against public policy even if it is waived in the trust and especially if there are strained relationships. Also, you could have all beneficiaries sign a waiver of accounting so that no accounting is required by you, the trustee. Additionally, If you are the trustee and only beneficiary then you do not have a duty to account to yourself.

What is required for a proper trust accounting? The California Probate Code Section 16063 tells us that a trust accounting should contain the following information:

“(1) A statement of receipts and disbursements of principal and income that have occurred during the last complete fiscal year of the trust or since the last account.

(2) A statement of the assets and liabilities of the trust as of the end of the last complete fiscal year of the trust or as of the end of the period covered by the account.

(3) The trustee’s compensation for the last complete fiscal year of the trust or since the last account.

(4) The agents hired by the trustee, their relationship to the trustee, if any, and their compensation, for the last complete fiscal year of the trust or since the last account.

(5) A statement that the recipient of the account may petition the court pursuant to Section 17200 to obtain a court review of the account and of the acts of the trustee.

(6) A statement that claims against the trustee for breach of trust may not be made after the expiration of three years from the date the beneficiary receives an account or report disclosing facts giving rise to the claim.”

As trustee, you may be wondering, what defines a beneficiary and who gets a copy of this accounting? The Probate Code states, “each beneficiary to whom income or principal is required or authorized in the trustee’s discretion to be currently distributed” is entitled to an accounting. This means anyone named in the trust but can also mean people that are not specifically named in the trust.

If you are a beneficiary that has not received an accounting then you must make a demand to the trustee.

Coastal Pacific Law attorneys are experienced in estate planning, and can help with your trust administration, probate administration, wills and trusts. To schedule a complimentary consultation, call (619)786-6563, or fill out a Contact Request Form.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

Photo by Fabian Blank 

Posted from San Diego, California, United States.