Trust Accounting

Trust accounting is a crucial process for managing trust assets and protecting the interests of the trust creator. Our trust accounting attorneys at RMO deeply understand legal regulations, fiduciary duties, and trust accounting requirements to help safeguard client assets and ensure legal compliance while maintaining accuracy, transparency, and integrity at every step.

What is Trust Accounting 

Trust accounting is the bookkeeping required for trust accounts. In most jurisdictions, a trustee has a duty to keep the beneficiaries of the trust reasonably informed by an accounting of the trust assets and how they have been used. Generally, trustees are required to provide this information at least once a year, as well as at the termination of the trust, and whenever the trustee of a trust changes. A beneficiary can also demand an accounting, and the trustee must provide it within a specific time frame, depending on the jurisdiction. 

​​Trust accounting is a crucial process for managing trust assets and protecting the interests of the creator, called the settlor. Our trust accounting attorneys at RMO deeply understand legal regulations, fiduciary duties, and accounting requirements to help safeguard client assets and ensure legal compliance while providing accuracy, transparency, and integrity throughout.

How does a Trust Accounting Litigation Attorney help?

During trust accounting, an attorney plays an important role in safeguarding clients’ financial interests and can assist with any disputes as they arise. Trust litigation attorneys with accounting experience have a deep understanding of the process and legal accounting requirements for keeping track of funds and assets in a trust and ensuring they are managed with care and transparency.

An attorney’s responsibilities include providing assistance in navigating legal compliance and ensuring that trustees fulfill their duties. 

At RMO, we help clients comply with California Probate Code §16060 and to keep beneficiaries reasonably informed of trust accounting, and representing parties in trust accounting disputes. 

While we help our clients in Texas, navigate Texas Prop. Code § 113.151 & § 113.152 should the need arise. 

Our trust litigation attorneys at RMO offer support and guidance so trustees understand their responsibilities and accountings are consistent with all assets and transactions that exist surrounding a trust.

What Does a Trust Accounting Litigation Attorney do?

Trust litigation attorneys have several responsibilities when supporting a client with accounting duties, from helping trustees understand their reporting duties to ensuring beneficiaries receive complete transparency in the process. Our trust litigation attorneys at RMO Lawyers can provide support and guidance in any of the following areas.

Navigating Legal Compliance

Trustees have a fiduciary duty to keep beneficiaries reasonably informed and report accounting to the beneficiaries at least annually, depending on state law. Trustees can rely on our lawyers at RMO to provide guidance and support in navigating and remaining in alignment with legal compliance, ensuring meticulous adherence to all legal requirements, while clarifying the necessary actions required for compliance with the trust document’s provisions

Managing Financial Transactions

Trustees are responsible for handling transactions like paying taxes and distributing assets to the appropriate parties. Our trust litigation attorneys can help trustees navigate these responsibilities, maintain compliance with the law, and avoid incurring unnecessary fees or charges, providing guidance on trust investments and adhering to the prudent investor standard to optimize the trust’s financial growth

Resolving Disputes and Challenges

Disputes can arise surrounding trust accounts, document interpretation, and asset management. RMO trust litigation attorneys can help resolve accounting disputes, resolving potential conflicts of interest or undue influence claims from beneficiaries to uphold the trust’s integrity through various legal procedures, such as mediation, litigation, and other approaches, to bring about the best possible outcome and protect the interests of each client.

Ensuring Fiduciary Responsibility

Trustees have a legal duty, known as their fiduciary duty, to act in the best interests of the trust and any beneficiaries. Our attorneys at RMO lawyers will provide relevant guidance for upholding fiduciary duty and managing a trust account while prioritizing transparency and accountability.

Common Trust Accounting Disputes

Trust accounting can lead to a wide variety of potential disputes among interested parties. From mismanagement of assets to errors in documenting trust accounting, RMO Lawyers can support clients in all the following disputes.

Disputed Trust Distributions

Interested parties and beneficiaries may have conflicts regarding entitlements to distributions. These can arise due to misinterpretations of trust documents or ambiguity in trust provisions, or conflicting claims. RMO lawyers can help parties in a trust dispute come to a resolution that aligns with the settlor’s wishes.

Trustee Fees and Compensation Disputes

Trustees may charge fees related to their accounting or trust management services. Beneficiaries and other interested parties may raise disputes over the reasonableness of these fees, concerns over expense reimbursement, or challenge the level of compensation for trustee services.

Allegations of Fraud or Misrepresentation

Beneficiaries may have concerns about the integrity of a trustee or others managing trust accounting and assets. If beneficiaries suspect fraud or misrepresentation, our lawyers can help gather evidence and build a case to either highlight any potential wrongdoing or establish a defense.

Failure to Maintain Accurate Records

Trustees are responsible for maintaining accurate accounting records, fulfilling all appropriate documentation, and reporting to beneficiaries and the court. California Probate Code §17200 grants beneficiaries the right to file a petition for accounting of a trust. RMO Lawyers can support beneficiaries in raising concerns about maintaining accurate records as well as provide guidance for trustees in appropriate recordkeeping.

When Should I Contact A Trust Accounting Litigation Attorney about Accounting?

Trust accounting is critical to the management and distribution of a trust, and improper accounting can be damaging to all parties interested in a trust. Therefore, there are many situations where the support of a trust accounting attorney may be helpful. 

An attorney can ensure careful alignment with state regulations, represent beneficiaries concerned with reporting, and more. Because of a trust accounting attorney’s wealth of experience, there are a variety of situations where you can benefit from their support. 

You should consider contacting a trust litigation attorney if:

  • You are appointed as a trustee
  • You have been accused of wrongdoing or mismanagement of trust assets
  • You have concerns about a trustee’s management of assets
  • You object to accounting information provided by a trustee
  • You have questions about legal regulations related to trust accounting

Generally, you should contact a trust accounting attorney whenever you have concerns surrounding the management of a trust or its assets. If you’re unsure whether your concern warrants the support of a trust accounting attorney, schedule a consultation with us at RMO Lawyers.

Our Case Results

RMO has a proven track record of protecting people and defending legacies.

Summary Adjudication of Disinherited Beneficiary’s Trust Contest
Swiftly secured the dismissal of a trust contest of a disgruntled, disinherited trust beneficiary on a motion after strategically allowing the trust contest period to expire before serving a notice of proposed action to distribute trust assets to the trust’s remaining beneficiaries and nothing to the disinherited beneficiary.
Secured Family’s Business Legacy
Representing the successor family trustee, secured the generational family business for the decedent’s heirs by acquiring from a disgruntled beneficiary their interest in the family business on extremely favorable terms that will allow the family to continue operating the family business for future generations to come.
Defense of Financial Elder Abuse Claim Against Surviving Spouse Trustee
Successfully defended a surviving spouse trustee against financial elder abuse and other claims made by family members who said she had fraudulently transferred assets to herself from her late husband’s trust and estate.
Prevented Trustee Removal for Badly-Lawyered Trust Accounting
Staved off suspension, removal and surcharge for a trustee who had failed to properly or timely provide court-ordered trust accountings to trust beneficiaries and was staring down an imminent deadline, as well as suspension, removal and surcharge.
Trustee Removal for Fraud
Neutralized and secured removal of a hostile co-trustee who was attempting to bilk our client’s trust of millions of dollars through a series of fabricated claims.
Thieving Trustee Removed and Surcharged
Secured removal of a thieving co-trustee daughter whose malfeasance left her own mother destitute and unable to pay her bills, including recovery of the stolen assets, attorney fees and costs.
Trust Beneficiary Dispute Squashed & Partition Avoided
Swooped in on behalf of an institutional trustee after years of protracted litigation to secure a decision from the Los Angeles probate court to end a years-long dispute between feuding siblings over the distribution of their parents’ estate, avoiding distribution of assets in-kind, which would have only resulted in partition.
Sub-Trust Allocations Defended
Client’s mother survived step-dad and succeeded him as trustee of their family trust. After mom passed, step-dad’s children alleged she had improperly allocated trust assets to favor her survivor’s trust, which went to our client, over the marital trust, which went to step-dad’s children. Using historic appraisals and valuations, demonstrated the disputed allocation was reasonable, resolving the dispute.
Inept Trustee Removed & Client Appointed Successor Trustee to Save Estate
Non-responsive and ineffective trustee who had done little to nothing to administer the trust or protect trust assets from waste following decedent’s passing was removed and our client appointed as successor trustee by the probate court, avoiding further damage.
Racist Trustee Removed and Surcharged
Removed and obtained surcharge of a non-beneficiary family trustee who hurled racial epthets at our client, refused to account, and tried to sell the house intended for our sole trust beneficiary client out of spite, securing the home for our client and her family.
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Who Can Hire a Trust Accounting Litigation Attorney?

Anyone involved in trust matters who requires assistance with trust accounting issues may benefit from a trust accounting attorney. Our trust accounting attorneys at RMO Lawyers support all the following clients in trust-related disputes or procedures.

BENEFICIARIES

If beneficiaries have any concerns surrounding trust accounting, they have a right to file an accounting objection against trustees. Our lawyers can offer support in the process of highlighting mismanagement of trust assets, addressing breaches of fiduciary duty, and uncovering failure to distribute or provide an accounting of assets.

TRUSTEES

Trustees have a duty to maintain a record of accounting of trust assets and how they have been used, as well as sharing this information with beneficiaries. RMO Lawyers can provide guidance on state accounting requirements and defend against allegations of trust mismanagement or breach of fiduciary duty.

CO-TRUSTEES

Co-trustees have a right to object to trust accounting prepared by a co-trustee. An attorney can gather evidence to find validity in this objection and help build a case to pursue appropriate restitution for the trust.

CREDITORS

Creditors looking to retrieve debts from a decedent may benefit from a trust accounting attorney to review financial records around the trust and determine the priority of debts to be resolved. RMO can support creditors in retrieving debts through legal processes and pursuing legal action to do so if necessary.

INTERESTED PARTIES

Other interested parties may include any individual or entity with a legitimate interest in the trust or administration, including heirs, guardians, conservators, or charitable organizations named as beneficiaries. Our trust accounting attorneys at RMO will support these parties in resolving disputes and complying with legal requirements.

SCHEDULE A FREE CONSULTATION

Be advised that the RMO Client Relations Team will reach out prior to your scheduled time, as our policy requires that we gather additional information concerning the parties to your case before we can confirm your consultation. In the event that we are unable to reach you, regrettably, we will need to cancel your requested consultation.

Communication Disclaimer

Please note that communications by you to RMO LLP or any of its lawyers through this website do not create an attorney-client relationship between you and the firm. Do not send any privileged or confidential information to the firm through this website or otherwise until instructed in writing from us to do so. 

FAQs About Trust Accounting Law

The trust accounting responsibilities can vary depending on the jurisdiction and the nature of the trust or fiduciary arrangement. However, in most cases we see at RMO it is the responsibility of the trustee to ensure accurate and regular accountantings.

What is included in a trust accounting can vary depending on the type of trust and jurisdiction. In California, under Probate Code §16063 and §160, a trustee accounting to beneficiaries must include the following information regarding the last complete fiscal year of the trust or the time since the last accounting was done:

  • A statement of receipts and disbursements of principal and income that have occurred.
  • A statement of the assets and liabilities of the trust.
  • The trustee’s compensation.
  • The agents hired by the trustee, their relationship to the trustee, if any, and their compensation.
  • The property on hand at the beginning of the period covered by the account.
  • The value of any assets received during the period of the accounting.
  • The amount of any receipts of income or principal, with certain exceptions.
  • Net income and loss from a trade or business.
  • Gains and loss on sales.
  • The amount of disbursements, excluding disbursements for a trade or business or distributions.
  • Distributions to beneficiaries.
  • Property on hand at the end of the accounting period.

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In California, under California Probate Code §16062, trustees are obligated to provide an account to each beneficiary annually, upon the trust’s termination, and when there is a change of trustee. Additionally, trustees must furnish an accounting within 60 days if a trust beneficiary requests it in writing.

In Texas, trustees are not obligated by common law or statute to regularly provide an account to trust beneficiaries. Instead, the duty to periodically account to beneficiaries arises only if it is specifically stipulated in the trust instrument. However, if a beneficiary requests the accounting, under Tex. Prop. Code § 113.151, the trustee must provide a written statement of accounts covering all transactions since the last accounting or since the creation of the trust, whichever is later, within 90 days of the request.

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