California Trust Accounting Requirements

An accounting of a Trust includes crucial details such as all financial transactions, liabilities, assets, and compensation paid to the Trustee. At Hess-Verdon & Associates, our top-rated California trust attorneys assist clients with complex trust accounting issues. Discover more about the Trustee’s obligations under California’s trust accounting requirements and how beneficiaries can access essential trust information.

A Brief Overview of California Trusts and the Role of a Trustee

Trusts are a common estate planning tool in California, set up by a trustor to benefit trustees. The Trustee, as the legal asset holder, must complete the Trust Administration process before distributing assets to beneficiaries, ensuring all financial transactions are accurately recorded. Upholding fiduciary duty is paramount, meaning actions taken must always benefit the trust’s beneficiaries.

What is an “Accounting” for a California Trust?

California’s probate laws, not requiring trust registration or filing, mandate that trustees provide beneficiaries with an accounting, detailing the trust’s activities to ensure transparency. Section 16063 of the California Probate Code lists the information needed in a trust’s formal accounting, including all transactions, assets, liabilities, Trustee compensation, and hired professionals. Trustees are required to provide this accounting annually, at trust termination, and upon the appointment of a new trustee.

What Parties are Entitled to Receive an Accounting

According to California Probate Code Section 16062(a), all trust beneficiaries are entitled to an accounting. The trust document may extend this right to other parties. Beneficiaries concerned about potential fraud or legal violations can petition the court for a current accounting, with Section 16060 requiring trustees to keep beneficiaries informed about the trust’s financial status.

What Happens if the Trustee Does Not Provide an Accounting?

If a trustee fails to provide an accounting upon request, beneficiaries can send a written demand. Failing to receive an accounting within 60 days allows for a court petition, potentially resulting in the Trustee being ordered to cover legal fees and facing sanctions for non-compliance with California’s trust accounting requirements. The Trustee may also be liable for damages caused by delays, neglect, fraud, or mismanagement.

Consult with an Experienced California Trust Attorney

For anyone facing challenges with a California trust, consulting with a knowledgeable trust attorney is crucial to protect your interests. Hess-Verdon & Associates is committed to assisting Southern California clients with their trust and estate planning needs. Contact us at 888-318-4430 for a consultation with our experienced trust attorneys.