Trust Accounting | Options for Beneficiaries

I’m Mike Hackard. Our law firm represents plaintiffs in trust, estate and catastrophic injury litigation. We know that when a trustee is indifferent or careless with trust funds and assets, it’s the beneficiaries who suffer.

We’re often retained by trust beneficiaries to petition a California Probate Court for an order removing the trustee. A request for a trust accounting is often a part of this petition. A trust accounting will show what the trustee has been up to with funds from the trust – it becomes a lot harder to conceal negligence, carelessness, self-dealing and even embezzlement by the trustee.

Trustees run out of excuses for failure to distribute funds, and silence is no defense.  When a petition for trust accounting is filed with the court, the time for evasion is over, and the time for accountability begins. Let’s review some of the basic obligations under law a trustee has to a beneficiary. These include:

The duty to “keep the beneficiaries of the trust reasonably informed of the trust and its administration.” (§ 16060.)

The duty to “account at least annually, [and] at the termination of the trust.” (§ 16062, subdivision (a).)

These accounts must contain information such as “a statement of receipts and disbursements, a statement of assets and liabilities, and the amount of the trustee’s compensation.” (§ 16063, subdivision (a)(1)-(3).)

Additionally, a trust account must include “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” with a three-year period to file a breach of trust claim from the time the beneficiary receives the accounting. (§ 16063, subdivision (a)(5), (6).)

And it’s important to remember that it’s the trustee who has the burden of proof. The trustee is required to establish the accuracy of the accounting as well as justify all spending and distributions. Deceptive trustees shouldn’t be able to hide behind of web of obscurity that they themselves create. And when the trustee doesn’t keep proper accounts, the court will have the final say.

Even with these rules in place, it’s not always easy to get a clear view of what the trustee is up to with trust funds. That’s where an experienced trust litigation attorney comes in – we know how to deal with trustee wrongdoing. Options include a lawsuit, discovery and court-ordered accounting.

If you’re a beneficiary who’s up against trustee silence, indifference, carelessness or wrongdoing, you can call Hackard Law today at 916-313-3030. We want to hear your story. Hackard Law: Attorneys Making a Difference.