What is a trust accounting objection, when should you file a trust accounting objection, and how long do you have to file an objection? Here’s a helpful overview and guide.
The Trustee of a trust is obliged to account, or provide information and records concerning the management of trust assets. The accounting must be provided to all trust beneficiaries. Typically, an accounting, whether formal or informal, is provided shortly after year-end, or when significant trust transactions occur. A trust beneficiary may also demand an accounting, and if the accounting is not made compel the Trustee account by filing a petition to compel accounting.
First, to request a formal accounting of your trust in California, here’s a downloadable form. Simply complete the form, and submit it to your Trustee. The trustee has 60 days to provide the formal accounting. If the trustee fails to account, or fails to fully account, within those 60 days then you may and likely will need to file a Petition to Compel Accounting, which seeks an order from the County Probate Court requiring the trustee to account.
Every trust beneficiary has the right to object to a trustee’s accounting. The objection can be based on a number of claims, including:
Every trust beneficiary has the right to object to a trust accounting. Co-trustees may also object to a trust accounting prepared by a co-trustee. Special trustees, so-called super trustees might also be able to object. Essentially, anyone who has a role or interest in the trust may object.
To file an objection, we recommend that heirs contact an experienced trust litigation attorney to review the accounting and advise what objections should be made and when. The attorney will help an heir prepare an objection and either submit it to the trustee for resolution, in the case of an informal accounting, or file it in the County Probate Court where the trustee resides.
In most cases, accounting discrepancies can be resolved informally with additional information and explanation. Many accounting discrepancies result from lack of good record keeping rather than nefarious intent. When that’s the case, the errors tend to be minor and resolvable, not requiring judicial intervention. When the discrepancies are more serious, beneficiaries, with the help of trust litigation counsel, will need to thoroughly examine the accounting irregularities to determine what fiduciary breaches may have occurred and how best to address them. While many of these issues too may be resolved with additional information and explanation, often the beneficiaries will need to file a petition for breach of fiduciary duty to initiate a formal process to have their concerns remedied. Filing a petition in the County Probate Court where the trustee resides will force the trustee to respond and give you a forum and process to have your concerns addressed, either informally through a mandatory settlement conference or mediation, or formally through a trial or evidentiary hearing in probate court.
Beneficiaries have up to 3 years to object to a trustee accounting, although there are some limited circumstances where that timeframe can be extended. Those exceptions are beyond the scope of this discussion. As an ordinary example, if a beneficiary receives and accounting on January 2, 2010, the heir has until January 1, 2013 to formally raise concerns with the court. If the beneficiary fails to file with the court within that timeframe, their ability to object likely will be lost due to the passage of time. Importantly, submitting objections to the trustee within the three years but not filing anything will not extend this three year deadline. The courts want you to be on top of things, and if you aren’t you will lose your right to object. It is important that when yo get an accounting, if you have questions, you take those questions to a trust litigation attorney who can analyze the accounting and address your questions.
The California Probate Code governs the administration of trust and probate estates. Probate Code section 16062 requires an annual accounting by the trustee to the trust beneficiaries. It also requires an accounting at trust termination, or when a trust changes trustees.
Contact a trust attorney the moment you suspect a Trustee is mismanaging or stealing from a trust, or providing incomplete information or misinformation. Most experienced trust attorneys will provide a free consultation to answer your questions. Contact us for a free consultation at RMO Lawyers anytime.
We recommend that heirs and beneficiaries find an experienced trust attorney familiar with the county probate court in the county where the Trustor lives or lived. For example, if an heir lives in San Diego, yet the trustor lived in Los Angeles, we recommend working with a trust attorney in Los Angeles. A Los Angeles probate lawyer will generally be more familiar with the Los Angeles Superior Court Probate Division, versus an out of state attorney.
RMO LLP serves clients in Los Angeles, Santa Monica, Orange County, San Diego, Kansas City, Miami, and communities throughout California, Florida, Missouri and Kansas. Our founder, Scott E. Rahn has been named “Top 100 – Trust and Estate Litigation” by SuperLawyers, Trusts and Estates Litigator of the Year, and Best Lawyers in America for Litigation – Trusts and Estates. For a free consultation, call (424) 320-9444 or visit: https://rmolawyers.com