Table of Contents
Understanding Beneficiary Rights to an Accounting
When a Trustee Must Provide an Accounting
Exceptions to the Accounting Requirement
What to Do If the Trustee Refuses to Account
How The Grossman Law Firm Can Help
Key Takeaways
- In California, most trust beneficiaries are legally entitled to receive an accounting from the trustee.
- Trustees must account annually, upon termination of the trust, and when a trustee changes.
- Limited exceptions exist, such as when the trust explicitly waives the accounting requirement or when the settlor is still alive.
- If a trustee refuses to provide an accounting, beneficiaries can demand one in writing and, if necessary, file a petition in the probate court.
- The Grossman Law Firm represents beneficiaries across California in enforcing their rights and compelling trustees to account.
Understanding Beneficiary Rights to an Accounting
If you’re a beneficiary of a California trust, you have a legal right to know how the trustee is managing the trust property. Trustees act in a fiduciary capacity, which means they must be transparent and accountable for every decision they make with trust assets.
At The Grossman Law Firm, we’ve guided beneficiaries for over twenty years in enforcing their rights and ensuring trustees fulfill their obligations. One of the most fundamental rights you have as a beneficiary is the right to receive a proper accounting.
When a Trustee Must Provide an Accounting
Under California Probate Code §16062, a trustee must provide a formal accounting to each beneficiary in the following situations:
- At least once a year, during the administration of the trust.
- When the trust terminates (for example, when all assets are ready to be distributed).
- When the trustee changes—for instance, if the original trustee resigns, is removed, or passes away.
The accounting must clearly show how trust assets were received, managed, and distributed. This transparency allows beneficiaries to confirm that the trustee acted in good faith and did not misuse trust funds.
Even if the trustee was replaced, the outgoing trustee must still account for their period of administration. If a trustee dies while serving, the court often requires the successor trustee to provide that accounting.
Exceptions to the Accounting Requirement
There are a few exceptions under California law where a trustee is not required to account:
- The trust document waives the accounting requirement. However, this waiver isn’t absolute—if there’s evidence the trustee has breached their duties, the court can still require an accounting.
- A beneficiary waives the right to an accounting. A waiver can be withdrawn if the beneficiary later suspects that wrongdoing has occurred.
- The trust is still revocable, and the settlor (the person who created it) is alive and mentally competent.
- The trustee and beneficiary are the same person.
Even if one of these exceptions applies, you may still have recourse if you suspect misconduct. Courts take fiduciary breaches seriously, and a trustee can be ordered to account, even if a waiver was obtained, if it appears they acted improperly.
What to Do If the Trustee Refuses to Account
If you’ve requested an accounting and the trustee ignores your request, you’ll need to take formal action. Start with a written demand for an accounting. It creates a record that you’ve made a good-faith effort to resolve the issue.
If the trustee still refuses to comply, your next step is to file a petition in the California Probate Court, asking the court to compel an accounting under Probate Code § 17200(b)(7).
Once the accounting is filed, your attorney can review it to determine if the trustee mismanaged funds or violated their fiduciary duties. If evidence of wrongdoing is found, the court can surcharge the trustee, that is, order them to personally repay any losses caused by their misconduct, and even remove them from their position.
Related Resources
- Irrevocable Trust Beneficiary Rights in California?
- Can a Trustee Be Removed for Mishandling Assets?
- Do Beneficiaries Have to Pay Taxes?
- 20 Ways Your Trustee Can Be Breaching Their Fiduciary Duties
- Can’t Afford a Probate or Trust Attorney?
FAQ
Do all beneficiaries receive an accounting?
No. Only beneficiaries who are entitled to or may receive distributions (income or principal) must be given an accounting.
What happens if the trustee never sends an accounting?
You can send a written demand, and if the trustee still refuses, you can file a petition in probate court to compel them to do so.
Can a trustee refuse to account if the trust waives it?
Sometimes. However, if there’s evidence of a breach of duty or mismanagement, the court can still order an accounting, even if a waiver has been obtained.
How far back can you request an accounting?
Beneficiaries can usually request an accounting covering the entire period of the trustee’s administration unless the court limits the timeframe.
How The Grossman Law Firm Can Help
At The Grossman Law Firm, we assist beneficiaries throughout California in enforcing their rights when a trustee fails to account or acts in bad faith. Our legal team assists in compelling accountings, reviewing financial records, and pursuing trustee removal or surcharge actions when necessary.
Call (888) 443-6590 or fill out our Get Help Now form.
Our Intake Specialists can evaluate your case to assess your situation at no cost to you. Qualifying cases will be scheduled for a Free Phone Consultation with Attorney Scott Grossman.
Originally Published: August 15, 2022