Trust Accounting Attorneys in Saratoga, CA
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A trustee manages someone else's money, and California law requires the trustee to show the work.
A trustee has a duty to keep beneficiaries reasonably informed about the trust and its administration ( Probate Code § 16060). On top of that, Probate Code § 16062 requires a formal accounting at least annually, when the trust terminates, and whenever there is a change of trustee, to each beneficiary who is entitled to current distributions or may receive them in the trustee's discretion.
The Probate Code spells out what an accounting must contain.
Under Probate Code § 16063, an accounting has to include:
- Receipts and disbursements of principal and income for the period.
- The trust's assets and liabilities at the end of the period.
- What the trustee paid themselves in compensation.
- The agents the trustee hired, any relationship to the trustee, and what they were paid.
- A statement that the beneficiary may ask the court to review the account and the trustee's acts.
- A statement that claims for breach of trust are barred three years after the beneficiary receives an account disclosing the facts.
A spreadsheet or a bank statement forwarded by email is not the same thing. Missing pieces are often the first sign that something deserves a closer look.
Every accounting starts a clock, so read it when it arrives.
The three-year warning in every accounting is real. Some trusts also set a shorter period to object in writing, which can be as short as 180 days when the trustee gives the notice required by Probate Code § 16461. Putting an accounting in a drawer can cost a beneficiary the right to challenge what it discloses.
When a trustee will not account, the court can order it.
If a trustee does not provide a requested account within 60 days after a beneficiary's written request, and no account was provided in the six months before the request, the beneficiary can petition the probate court to compel one under Probate Code § 17200. Even when the trust document waives accountings, the court may still compel one if it is reasonably likely that a material breach has occurred ( Probate Code § 16064).
An accounting either answers the question or becomes the evidence.
A complete, accurate accounting often resolves a beneficiary's concerns. One that is late, incomplete, or does not add up can support a petition to surcharge the trustee for losses, reduce the trustee's compensation, or remove the trustee ( Probate Code § 16420; Probate Code § 15642). We look at what the numbers show before recommending which of those steps, if any, makes sense.
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Trust Accounting FAQs
A trust accounting is the trustee's written report on how the trust has been managed. Under Probate Code section 16063 it must show receipts and disbursements of principal and income, the trust's assets and liabilities, the trustee's compensation, and the agents the trustee hired and what they were paid. It must also tell the beneficiary that they can ask the court to review the account and the trustee's acts.
Probate Code section 16062 requires the trustee to account at least annually, when the trust terminates, and when there is a change of trustee. The duty runs to each beneficiary to whom income or principal is required, or authorized in the trustee's discretion, to be currently distributed. There are exceptions, including for some trusts created before July 1, 1987.
Yes. If the trustee fails to provide a requested account within 60 days after the beneficiary's written request, and no account has been made in the six months before the request, the beneficiary can petition the probate court to compel an accounting under Probate Code section 17200. A clear written demand is usually the first step.
In part. A trust can waive the annual accounting, but under Probate Code section 16064 the court may still compel the trustee to account if it is reasonably likely that a material breach of the trust has occurred. A waiver is also void for certain trustees, such as some trustees who drafted the trust or are closely connected to the person who did.
Generally not to the other beneficiaries. While a trust can still be revoked, Probate Code section 16069 provides that the trustee does not owe them an accounting. That usually changes when the settlor dies or becomes incompetent, which is often when accounting disputes begin.
Every accounting must warn that claims for breach of trust may not be made more than three years after the beneficiary receives an account or report disclosing the facts behind the claim. Some trusts set a shorter written-objection period, which can be as short as 180 days when the trustee gives the notice Probate Code section 16461 requires. Read each accounting promptly.
An accounting that does not add up can support a petition asking the court to settle the account, surcharge the trustee for losses, reduce or deny the trustee's compensation, or take other steps listed in Probate Code section 16420. The right response depends on what the numbers show and how much is at stake.
It can be part of the case. Under Probate Code section 15642 a court may remove a trustee who has committed a breach of trust, and violating any duty the trustee owes a beneficiary, including the duty to account, is a breach of trust under section 16400. Courts look at the whole picture, not a single late report.
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Results depend on the specific facts and law of each matter. Prior results do not guarantee or predict a similar outcome in any other case.