If you are a beneficiary of a California trust, one of your most important rights is the right to information about how the trust is being managed. A trust accounting is the primary way that information reaches you. Understanding what an accounting should contain — and how to read one — helps you confirm that a trustee is handling the trust properly.
What is a trust accounting?
A trust accounting is a formal report, prepared by the trustee, that shows the financial activity of the trust over a defined period. It is meant to give beneficiaries a clear and complete picture of the trust’s assets, income, expenses, and distributions so they can evaluate the trustee’s stewardship.
What a California accounting generally includes
California law sets out what a proper accounting should contain. While the exact contents depend on the situation, an accounting typically shows:
- A statement of receipts and disbursements of principal and income during the accounting period
- A statement of the assets and liabilities of the trust at the end of the period
- The trustee’s compensation for the period
- The agents hired by the trustee, their relationship to the trustee (if any), and their compensation
- A statement that the recipient may petition the court to review the account and the trustee’s actions
- A statement of the applicable time limits for making certain claims against the trustee
When are beneficiaries entitled to an accounting?
Trustees generally owe an accounting to current income or principal beneficiaries, and in many cases an accounting is due at least annually, when the trust terminates, and on a change of trustee. Some trust documents waive or modify accounting requirements, and there are limits on how far those waivers reach. Because the rules and exceptions are detailed, it is worth confirming your specific rights rather than assuming.
Reading an accounting: questions to ask
- Do the beginning and ending asset balances reconcile with the activity reported in between?
- Are distributions consistent with the terms of the trust?
- Do fees paid to the trustee and to any agents appear reasonable for the work described?
- Are there transactions that lack explanation, or assets that seem to be missing?
- Has the value of major assets changed in a way that is not explained?
When to seek legal guidance
If an accounting is late, incomplete, or raises questions you cannot resolve, you have options — from requesting additional information to petitioning the court. An attorney who focuses on trust and estate matters can help you understand the accounting, evaluate whether the trustee has met their duties, and decide what, if anything, to do next.
This article is general information about California law and is not legal advice. Every situation is different; for advice about your circumstances, speak with a qualified attorney. Reading this page does not create an attorney-client relationship.