Trust Accounting Disputes

When a trustee neglects their duty to provide a comprehensive account of a trust’s income, debts, assets, and liabilities, it can lead to disputes and legal complexities. The regulations outlined in Probate Code §§16060 – 16064, 15800, 15802 – 15805 outline a trustee’s obligations regarding accounting and reporting. Should you believe that a trustee has failed in their accounting responsibilities, seeking assistance from a trust dispute lawyer is crucial.

Understanding Trustee Duties

The duties of a trustee differ based on the nature of the trust – whether it’s revocable, irrevocable, or testamentary. These duties can be modified within the terms of the trust document, provided they adhere to statutory requirements and public policy guidelines.

Accountability to Beneficiaries

According to Probate Code §16063(a), a trustee’s account must contain the following elements:

1. Statement of receipts and disbursements: Detailing both principal and income.
2. Statement of assets and liabilities: Outlining the trust’s financial standing.
3. Information about trustee compensation and agents: Clarifying the relationships between trustees and their agents.
4. Notification of the recipient’s right to petition for court review: Ensuring transparency in the process.
5. Time limitations: Acknowledging that claims against the trustee for breach of trust can’t be made after three years from receiving the report.
6. Disclosure of claim-triggering facts: Providing facts leading to potential claims against the trustee.

Beneficiaries also have the right to request informal accountings and reports, except under specific circumstances.

Compelling an Accounting

Beneficiaries possess the right to demand financial information from the trustee, except in limited scenarios. They can petition the court to compel the trustee to report information and account if:

1. The trustee doesn’t provide requested reports within 60 days of a written request.
2. The trustee hasn’t submitted any account within six months before the written request.

If the trustee fails to comply, beneficiaries can seek court intervention. If the provided accounting is incomplete, suspicious, or unacceptable, objections can be filed. Navigating these complex legal aspects requires expertise. A trust dispute lawyer can help beneficiaries understand their rights, compel accountings, and address any discrepancies, ensuring a fair and transparent resolution in trust disputes.