![]() ![]() DEFINITION OF “ACCOUNTING.” California Probate Code section 16063 cites six separate types of data that must be provided in an “accounting”.The trustee is well advised to either provide an accounting or have good legal authority as to why the accounting need not be provided. Recently, California courts have been expanding the people who are entitled to a trust accounting so legal counsel should be consulted to determine whether an accounting is available. ![]() Absent specific exceptions, a trustee must submit annual accounting to, “…each beneficiary to whom income or principal is required or authorized in the trustee’s discretion to be currently distributed.” The trust document normally determines who is entitled to accountings based on the instructions as to distributions. In this state, the California probate code provides the statutory authority as to providing accountings to trust beneficiaries. They are private documents, essentially an agreement between the trustor who creates the trust and the trustee who maintains the trust for the benefit of the beneficiaries who are protected by the trust.Īnd since trusts are seldom filed or recorded with any government agency, laws have been established providing that heirs and beneficiaries have a method to review trust activities and what is happening with trust assets. Most trusts do not have regular court or state agency supervision. What that accounting is and when it is required is the subject of this article. In California, a trustee is required to account to the beneficiaries as to the activities of the trust unless certain exceptions apply. That includes doing nothing as trustee that is not in the interests of the beneficiary. The reader is invited to review the numerous other articles on this site to learn the basics of such trusts.Īs discussed in our article as to duties of trustees to beneficiaries, a trustee has a fiduciary duty to all beneficiaries, the highest duty known to law. These are commonly called “marital trusts” or “QTIP” trusts and probably constitute well over sixty percent of the revocable trusts that exist. Most trusts involve having the married couple create a trust whereby the children are the ultimate heirs of at least part of the estate but only after the surviving spouse dies. Trusts are an uniquely American estate planning invention and the revocable trust has become a standard tool used by most middle-class Americans to avoid the cost of probate. ![]()
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