Trust Accounting Requirements in California

California Trust Accounting Lawyer 

Trusts are an important estate planning tool. One of the various fiduciary duties that trustees have when it comes to administering trusts is fulfilling the trust accounting requirements. While this involves maintaining accurate records regarding all of the trust’s financial transactions, it also includes some reporting requirements. Trustees can delegate some of these accounting requirements to others, but the trustee will still be personally responsible for ensuring that all of them have been satisfied in a timely manner.

If you are a trustee and need some guidance regarding your obligations when it comes to trust accounting requirements (or with any aspects of administering trusts), you can count on the experienced North Hills trust administration attorney at the Law Offices of Darrell C. Harriman.

Trust Accounting Requirements in CA: An Overview of What Trustees Should Know

While there is a lot to know about accounting for trusts, the following provides an overview of some of the most important aspects of trust accounting requirements:

• Frequency of reporting – For trusts created after June 30, 1987, trustees will be required to annually report all of a trust’s accounting activities to all of the beneficiaries of the trust. Additionally, such reporting must be done whenever a beneficiary specifically requests it.
• What should be included in trust accounting reports – Any and all financial transactions associated with a trust must be reported (for the specified reporting period). While this can include tax payments, attorneys’ fees and other trust administration costs, it may also involve income to the trust (which can, for instance, come in the form of income from the sale of trust property, from rental properties, etc.).
• Exceptions to trust accounting requirements – There can be cases in which these trust accounting requirements can be streamlined. For instance, when the trustee is also the only beneficiary of the trust, such extensive reporting may be simplified (if not bypassed entirely).

It’s important that trustees are aware that there is a lot more to trust reporting requirements in California and that failing to meet these requirements can result in trustees being removed from their position (or even facing breach of fiduciary lawsuits).