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As a trustee, you are obligated to provide beneficiaries with accurate trust accounts under California Probate Code 16062. Remember that you are working for the beneficiaries, who are likely grieving the loss of a loved one, or may not know their beneficiary rights.  Furthermore, failure to provide accurate accounts could result in legal action by the beneficiary. While trustee accounting may seem like a daunting task, following California state guidelines for record-keeping and communicating information will ensure legal compliance and create better relationships with beneficiaries. 

 

What are Your Accounting Duties?

 

The duties of trustee accounting are included in California Probate Code 16063(a). The following outlines key information you will need to provide for your beneficiaries:

 

  • A statement of receipts and disbursements of trust principal and income. Include receipts from the previous fiscal year or since the last account was made.

 

  • A statement of assets and liabilities of the trust. This information is also pulled from the previous fiscal year or since the last account was made.

 

  • A statement notating that the beneficiary may petition the court to review the account. Should the beneficiary suspect any issues or want to review account information, they may have the right to initiate legal action.

 

  • A statement of breach of trust. Beneficiaries must make any claims of breach of trust within a 3 year limitation period.

 

  • Include any agents who helped with accounting. Detail the agent’s relationship to the trustee and any compensation they received from the last fiscal year or previous account.

 

  • Your compensation. If you received any compensation for your work, keep detailed records and include them in the account.

 

When Are My Accounting Duties Complete?

 

A trustee’s accounting duties cease when all beneficiaries of the estate have filed a waiver of trust accounting or submitted a written statement confirming that their interest in the account has been settled. Final trustee accounting may also conclude when all estate assets have been distributed in full; however, duties may continue if beneficiaries object to the final account.

 

How Can I Avoid Objections Over the Final Account?

 

Beneficiaries have a 3-year limitation period to file final account objections. To avoid this process, trustees may want to preemptively file a final court approval for the account, after which no objections can be made.  California Probate Code section 1064 outlines what trustees must include in the petition. The necessary components are similar to those of a traditional account but include a specific section for any records that may appear unusual or suspect.

 

If you need assistance with any area of trustee accounting, our attorneys at Gokal Law are here to help. Contact us or give us a call at 949 753 9100 to speak with our team about your situation.