What Are Trustee Accounting Requirements?

When you create a trust, one of the role you’ll name is that of trustee. With a revocable trust, you’re likely the trustee. But you’ll name a successor trustee who will be responsible for managing trust assets if something happens to you. If you create an irrevocable trust, another person should serve as the trustee from the beginning.

This role does come with responsibilities that anyone should be aware of when they first create this estate planning document and strategy.

Beneficiaries of a trust have the right to be reasonably notified about the administration of the trust. This means that the trustee has a fiduciary duty to keep those beneficiaries properly informed. Usually this occurs at least on an annual basis in the form of a trust accounting. This can be provided more frequently based on the needs of the trust and the discretion of the trustee.

Trust accounting reports should reflect those actions taken by the trustee and any other activities relevant to the administration of the trust. Usually trust documents contain language giving the trustee guidance and responsibility regarding accounting decisions. The trustee will always maintain this responsibility under general laws of trust and local statutes even if there is no specific language inside the trust about this accounting.

A beneficiary who asks for a formal accounting has the right to receive one and a trustee who refuses to acknowledge this right or respond to the beneficiary could be held personally accountable or compelled to provide an accounting by the court. In these circumstances, this highlights why it is so important to hire an experienced and knowledgeable trustee who will adhere to these accounting practices.

Need help with more information about creating a trust in California? Our office can help with that once you schedule an initial consultation.






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