TRUSTEE’S ACCOUNTING
Generally, the trustee of a living trust has a duty to account to the beneficiaries and report information. Depending on the type of trust, however, the duty may vary.
Except in certain circumstances, the trustee of a trust does not have a duty to account to the beneficiaries of trust if the trust is a revocable trust. On the other hand, beneficiaries of an irrevocable trust may force the trustee to account. In addition to accounting, the trustee of an irrevocable trust must give notice to the beneficiaries when the trust becomes irrevocable, when there is a change of trustee in an irrevocable trust, or when there is a change in power of appointment in the trust.
Except for the waiver of accounting by the beneficiary of trust, or by the trust instrument, a beneficiary of an irrevocable trust may ask the trustee to account. The beneficiary must request an accounting in writing, and must give the trustee 60 days to submit his or her accounting. The beneficiary of trust may not ask for an accounting by the trustee if an accounting has been made within the past 6 months.
Pursuant to Probate Code §16063(3), an account provided by the trustee must 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.
Beneficiary of the trust may file a lawsuit against the trustee if the trustee fails to submit accounting. In addition, the beneficiary of trust may file a lawsuit against the trustee if the trustee has not given full and complete account, or if the beneficiary believes that the trustee has breached his or her fiduciary duties.
Beneficiary of the trust may also object to the accounting submitted by the trustee. The objection may be based on insufficiency of accounting. The objection may also be based on breach of duties by the trustee. However, the objections may not be made if the same objections were previously made and court has ruled on it, the statute of limitations to make objections have expired, or certain previous actions taken by the trustee and the beneficiaries have received the notice of action.
The probate court would require a trial of the issues raised in the objections to the accounting, or for the breach of duties by the trustee.
For more information call us at (310)553-5562.
Generally, the trustee of a living trust has a duty to account to the beneficiaries and report information. Depending on the type of trust, however, the duty may vary.
Except in certain circumstances, the trustee of a trust does not have a duty to account to the beneficiaries of trust if the trust is a revocable trust. On the other hand, beneficiaries of an irrevocable trust may force the trustee to account. In addition to accounting, the trustee of an irrevocable trust must give notice to the beneficiaries when the trust becomes irrevocable, when there is a change of trustee in an irrevocable trust, or when there is a change in power of appointment in the trust.
Except for the waiver of accounting by the beneficiary of trust, or by the trust instrument, a beneficiary of an irrevocable trust may ask the trustee to account. The beneficiary must request an accounting in writing, and must give the trustee 60 days to submit his or her accounting. The beneficiary of trust may not ask for an accounting by the trustee if an accounting has been made within the past 6 months.
Pursuant to Probate Code §16063(3), an account provided by the trustee must 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.
Beneficiary of the trust may file a lawsuit against the trustee if the trustee fails to submit accounting. In addition, the beneficiary of trust may file a lawsuit against the trustee if the trustee has not given full and complete account, or if the beneficiary believes that the trustee has breached his or her fiduciary duties.
Beneficiary of the trust may also object to the accounting submitted by the trustee. The objection may be based on insufficiency of accounting. The objection may also be based on breach of duties by the trustee. However, the objections may not be made if the same objections were previously made and court has ruled on it, the statute of limitations to make objections have expired, or certain previous actions taken by the trustee and the beneficiaries have received the notice of action.
The probate court would require a trial of the issues raised in the objections to the accounting, or for the breach of duties by the trustee.
For more information call us at (310)553-5562.
