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.
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. Because of this, maintaining thorough and accurate records of the estate's finances is crucial.
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.
You must provide a California trust accounting to anyone with an interest or involvement in the trust. This typically means beneficiaries who receive a distribution of income and principal during an accounting period, along with trustees, are entitled to an accounting.
A trustee must keep accurate written accounts regarding the trust property, and for those beneficiaries who are entitled to current information (consistent with the terms of the trust instrument and applicable law and practice) must keep beneficiaries reasonably informed regarding trust administration and their ...
This legal tool is an extension of one of the most important trustee duties in California for beneficiaries to understand: The duty to keep beneficiaries reasonably informed. If a trustee fails to fulfill this duty, working with a lawyer is essential to preserve your inheritance and the integrity of the trust.
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.
In order for the beneficiary to hold the trustee accountable, the beneficiary must have information about what the trustee is required to do and what the trustee actually does. Thus, the trustee has a duty to account and to inform.
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.
Executors who violate their duty may face legal action by beneficiaries or creditors, although they cannot be held accountable for a decline in asset value unless it resulted from their unreasonable actions.
It details every transaction that occurred during the executor's administration of the estate as well as all the estate's assets. Before the executor can finalize probate and close the estate, they must provide a final accounting that includes: An itemized list of the estate's assets.
Beneficiaries can ask the courts to compel trustees to distribute trust assets, review the trust, or remove the trustee. A trustee might cite inadequate funds as a reason for not distributing assets. In this case, the beneficiary may have the right to request the trust's accounting information.
Trustees typically examine your financial transactions over the past two years. This review includes bank statements, credit card transactions, income records, and major financial activities.
They only hold the right to withdraw money on behalf of the trust. Any investments they make with the funds in a trust account must benefit the trust and the beneficiaries. If a trustee uses the funds from a trust account for their benefit, they will violate their fiduciary duty, resulting in severe consequences.
California statutory law requires a trustee to account annually to current trust beneficiaries, i.e., those who are currently entitled to receive distributions of income and principal during the accounting period. Any trustee, other than the settlor(s) who established the trust, has a duty to account.
If they are not settling the deceased's estate and moving the process along, someone else should take over. An executor can also be brought to court if they do not communicate with the beneficiaries. People should be told right away if they are included in a will.
While a formal estate accounting must be provided to beneficiaries at least once a year, beneficiaries can request an informal accounting at any time.
If a trust has two or more beneficiaries, the trustee has a duty to deal impartially with them and shall act impartially in investing and managing the trust property, taking into account any differing interests of the beneficiaries. (Amended by Stats. 1995, Ch.
Selecting the wrong trustee is easily the biggest blunder parents can make when setting up a trust fund. As estate planning attorneys, we've seen first-hand how this critical error undermines so many parents' good intentions.
If you are the designated beneficiary on a deceased person's bank account, you typically can go to the bank immediately following their death to claim the asset. In general, there is no waiting period for beneficiaries to access the money; however, keep in mind that laws can vary by state and by bank.
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.
One option available to beneficiaries, when faced with a trustee who refuses to give accounting, is to pursue legal action. By filing a lawsuit in probate court, beneficiaries can assert their rights and demand transparency from the trustee.
Demand letters must be sent in writing (email or regular mail) from each beneficiary directly to the trustee—or their attorney if they have one—requesting an account statement for all activity within the past year.