What are some accounting and surcharge issues that I might face as a trustee?
The scope of a trustee’s duties to account and report information is governed by Probate Code §§16060 – 16064, 15800, 15802 – 15805, and by the specific provisions of the trust instrument.
Scope of Duty
The trustees duties vary depending on whether the trust is a revocable trust, an irrevocable trust, or a testamentary trust. Finally, the duties can be made more stringent or relaxed by the terms of the trust instrument.
Account to Beneficiaries
When the trustee is required to account, but not required to submit the account for court approval, the content and presentation requirements of the account must comply with the format set out in Probate Code §16063. According to Probate Code §16063(a) the account must contain all of the following:
A. A statement of receipts and disbursement of principal and income;
B. A statement of assets and liabilities;
C. Information concerning the compensation of the trustee its agents;
D. The relationship of the agents to the trustee;
E. A statement that the recipient may petition for court review;
F. A statement that claims against the trustee for breach of trust may not be made after 3 years from receipt of a report or account disclosing facts giving rise to the claim.
Compelling an Account
Generally a beneficiary may request financial and other information concerning a trust from the trustee, with a few exceptions. The beneficiary has the right to file a petition to compel a trustee to report information and to account if: (A) The trustee failed to submit a requested report or account within 60 days after a written request; and (B) no report or account has been made within 6 months preceding the written request.