Hi, this is Keith Davidson from Albertson & Davidson.  In this video, I want to talk about whether or not you, as a trust beneficiary, are entitled to an accounting.  And the answer is maybe – which is a typical lawyer answer.  But let’s go through who is and who is not, necessarily, entitled to a trust accounting.

For starters, all current beneficiaries, income and principal beneficiaries, are entitled to an accounting of the trust assets – unless, the trust actually waives that right.  But if you are a current income or principal beneficiary of a trust, you are entitled to an accounting.  If you’re a remainder beneficiary, meaning that your rights aren’t vested yet, but they’ll come into place a current beneficiary passes away.  Then you may be entitled to an accounting.  But you’re not entitled to an accounting as a matter of right.  It’ll be up to the discretion of the California Probate Court.

What you are entitled to as a remainder beneficiary is information.  So you should be able to get and you are entitled to receive any information about the trust assets, the trust administration, and anything else that deals with the business of the trust.  Now that’s different from an accounting.  An accounting is a formal document that sets out charges and credits in a very systematic way, as required by the Probate Code.  But, information can be just as good if not better.

So for example, if you receive a copy of all the bank statements or all the financial account statements, that might be just as good as an accounting because you can look at those and you can see what’s been happening with the finances of the trust.  So, just because you’re not entitled to an accounting doesn’t mean that you’re left out in the dark.  You might still be entitled to information.

There’s a big caveat here.  Everything I just talked about is for irrevocable trusts.  Those are trusts that can’t be amended or changed.  If the trust is revocable, then the trustee only owes a duty to the person who has the power to revoke it, which typically is the person who created it.  If Mom and Dad create a revocable trust and they named themselves as trustee, they don’t have an obligation to give you information while they’re alive.  But, once they pass, and the trust becomes irrevocable, which is usually what happens, now your rights come into existence and you have a right to either an accounting or information, depending on the type of beneficiary you are.

  • Janie Rolfson

    Does a surviving spouse and trustee of what is now an irrevocable trust, have an obligation to provide the co-trustees (my step brother and I) and beneficiaries (children/step children) a copy of the now irrevocable trust. Do the beneficiaries have a right to an accounting of the trust and can the Trustee now (my stepmom) change the trust in respect to named beneficiaries, spouses that are originally named in the trust? This is a California Trust. My Father and Step Mothers trust. My Father passed in 2009 and we have never received any information and are concerned she sold the family home, how this trust is being managed and if it’s being changed to advantage her boys, in lieu of my brother and I.

    • davidsonkeitha

      Once a trust becomes irrevocable, you have a right to see a copy of the irrevocable portion if you are a trust beneficiary, or if you are an heir-at-law of the decedent. Sounds like you may be both in this situation. Unfortunately, not every trust created by a husband and wife becomes irrevocable after the first spouse dies. It depends on the trust terms. Some trusts will state that after the first spouse dies, the trust remains revocable by the surviving spouse. If that is the case, then the surviving spouse does NOT have to give you a copy of the trust, and she can change the named beneficiaries if she chooses to do so.

      On the other hand, if the trust, or a portion of the trust (such as a “Bypass Trust”), is irrevocable after your father’s death, then you should receive a copy of the trust, and your step mother likely cannot change the beneficiaries of that portion of the trust.

      It can be rather confusing, but the first step is to obtain a copy of the trust and find out what your rights are. If you have asked for a copy of the trust in writing, and she refuses to give you a copy, then you have to file a petition in probate court and ask the court to order her to give you a copy. Unfortunately, there is no other way to force her to give you a copy.