If a trustee has not provided beneficiaries with the required annual accounting or requested information, they could be regarded as breaching their duties, which could make them liable to legal recourse.
Beneficiaries are entitled to request bank statements from the executor by making an informal written request for them. Some executors may attach bank statements to their accountings for added transparency without beneficiaries having to ask, but it's usually not a requirement for them to do so.
Under California Probate Code §16062, trustees are obligated to account to each beneficiary annually, upon trust termination, and following a change in trustee. Additionally, if a beneficiary requests an accounting in writing, the trustee must provide it within 60 days.
What types of fiduciary duties does a trustee have to the beneficiaries? The fundamental duties of a trustee are as follows: (1) the duty of good faith and loyalty; (2) the duty of reasonable skill and diligence; (3) the duty to give personal attention; and (4) the duty to keep and render accounts.
As previously mentioned, trustees generally cannot withhold money from a beneficiary for no reason or indefinitely. Similarly, trustees cannot withdraw money from a trust to benefit themselves, even if the trustee is also a beneficiary.
As an executor, you must provide a formal accounting at least once a year, but beneficiaries can request an informal probate accounting in California at any time. When they do, you must produce it.
The trustees must look after the trust property carefully for the benefit of the beneficiaries. In doing so, the trustees must act unanimously (if there's more than one) and always act in the best interests of the beneficiaries and not benefit themselves. We've set out the duties of trustees in more detail here.
How to Get an Accounting. The California Probate Code gives beneficiaries the right to demand a full and complete accounting of the trust's assets, starting from the date of death of the decedent to the date of demand. A letter, directly to the trustee, making a demand for an accounting is the first step.
All beneficiaries and interested parties (such as the lawyer representing a beneficiary) have the right to review the estate accounting and request more information about any actions taken.
Financial statements provide governments, investors, executives, and lenders with a picture of a company's financial activities and profitability. Statements required by Generally Accepted Accounting Principles (GAAP) are the balance sheet, the income statement, and the statement of cash flows.
A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.
Negligence or Mismanagement of Trust Assets
So, if a trustee fails to do so, whether it is out of negligence, incompetence, or outright malice, then a trustee is unfit to manage the trust, and this constitutes a breach of his or her fiduciary duty and can be one reason for removing a trustee.
Yes. The bankruptcy trustee will look at your bank account.
If an interested party has the right to retain an experienced Estate Litigation Attorney who can petition the court and obtain an order forcing an Agent, Executor or Trustee to file a Formal Accounting.
A trustee may withhold money or assets from a beneficiary if they must focus on other responsibilities surrounding the estate. For example, if the estate becomes subject to a tax audit or litigation arises, a trustee may refuse to give beneficiaries their share of the assets until these issues are resolved.
Yes, as a beneficiary, you have a right to review all trust's records, including bank statements, the checking account ledger, receipts, real estate sales agreements, escrow closing statements, and invoices. This transparency is vital to defending your inheritance.
Fiduciary Duty to Beneficiaries
The trustee must always put the beneficiaries' interests ahead of their own and avoid conflicts of interest. If a trustee withdraws money for personal reasons or uses trust assets inappropriately, they can be held personally liable for any losses to the trust.
Beneficiary Rights and Accounting
According to California Probate Code section 10950, if more than a year has passed since the beginning of probate administration and an accounting has not been filed, interested parties are entitled to file a petition with the court to make the executor to complete an accounting.
Q: Can an Executor Withhold Money From a Beneficiary in California? A: Executors do not have the authority to act outside the guidelines stipulated in the will. An executor cannot withhold money from a beneficiary unless they are directed to do so through a will or another court-enforceable document.
When a person passes away, their assets are distributed in accordance with either their estate plan or California's intestate succession laws. However, certain assets, including most bank accounts, can pass directly to beneficiaries, without the need for probate or the court's intervention.
If the accounting is not provided in the proper form as required by the law, then after sixty days the beneficiary can file a probate court petition to seek a court order requiring the trustee to prepare the proper accounting and can request reimbursement for the fees and costs they incur in bringing the petition.
What a Trustee Cannot Do. A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries.
Serving as the trustee of a trust instills a person with significant power. They have access to all the trust assets, but with a catch: They can only use those assets to carry out the instructions of the trust.