Beneficiaries cannot evaluate trust administration without reliable information. When a trustee refuses to explain transactions or provide a required account, California law may allow a beneficiary to make a written request and, when appropriate, petition the probate court.
Information and an Accounting Are Different
Probate Code section 16060 generally requires a trustee to keep beneficiaries reasonably informed about the trust and its administration. Section 16061 addresses information relating to administration that is relevant to the requesting beneficiary’s interest, subject to statutory limitations.
A formal accounting is more structured. Section 16062 generally requires accountings at specified times for specified beneficiaries, but statutory and trust-based exceptions may apply. Beneficiary status, the type of trust, whether the trust is revocable, the identity of the person holding the power to revoke, and prior waivers or reports may affect the analysis.
What Should an Accounting Contain?
Probate Code section 16063 generally requires a trust account to disclose information including receipts and disbursements, assets and liabilities, trustee compensation, and agents hired by the trustee and their compensation.
A useful account should allow the reader to reconcile:
- Beginning assets;
- Income and receipts;
- Purchases and sales;
- Expenses and fees;
- Distributions;
- Gains and losses;
- Liabilities; and
- Ending assets.
The beneficiary can then identify particular omissions, unexplained transfers, questionable valuations, excessive compensation, or transactions requiring supporting records.
Begin With a Focused Written Request
A written request should identify the beneficiary’s status, the information or accounting period sought, the relevant transaction or asset, and the requested supporting records. The beneficiary should preserve proof of delivery and the trustee’s response.
Overly broad demands for “everything” may create avoidable disputes. A focused request is easier to evaluate and enforce.
When May the Court Be Asked to Intervene?
Probate Code section 17200 permits a beneficiary to petition concerning the trust’s internal affairs. The statute includes proceedings to compel specified information or an accounting when the trustee has failed to respond within the applicable framework.
The statute addresses a 60-day period after qualifying written requests and limits repetitive demands when sufficiently recent information or an account has already been supplied. The exact requirements should be checked before filing.
The court may determine whether an account is required, define the accounting period, order production of information, review the trustee’s acts and compensation, settle the account, and address properly presented objections.
Object to Specific Transactions
An objection should identify the entry, omission, transaction, valuation, fee, or distribution being challenged and explain the factual and legal basis. Bank statements, cancelled checks, invoices, deeds, escrow documents, tax records, appraisals, and communications can help test the account.
Treating the entire account as fraudulent without identifying particular discrepancies may weaken an otherwise legitimate concern.
Attorney Fees and Deadlines
Probate Code section 17211 permits a discretionary attorney-fee award in certain contests involving a trustee’s account when the court finds that a party acted without reasonable cause and in bad faith.
An account or written report may also affect the limitations period for breach-of-trust claims under section 16460. A beneficiary should record when each account or report was received and examine whether it adequately disclosed a potential claim.
The Practical Takeaway
The most effective accounting dispute usually begins with a precise request and develops into transaction-specific objections. Beneficiaries should collect the trust, prior accounts, statements, property records, and communications early rather than waiting until records disappear or a limitations issue develops.
Legal Authorities and Public Resources
- California Probate Code §§ 16060–16063
- California Probate Code §§ 16460, 17200 and 17211
Related practice areas: Family Law and Related Areas