Trustee Refuses To Give Accounting

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“It is not uncommon for beneficiaries to not keep track of the balances on trust accounts after a person dies, but they are entitled to trust benefits and disbursements. You must pay attention to the accounting documents of your trustee, and you should follow these steps if that trustee refuses to give accounting upon request so as not to expose your family to bad actors.”

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Trustee Refuses To Give Accounting

What Are The Responsibilities Of A Trustee In Terms Of Accounting?

An individual who serves as a trustee administers money held for the benefit of another individual or group of individuals, called beneficiaries. The trust’s creator (the settlor or grantor) chooses the trustee to manage the trust’s funds and properties for the beneficiaries.

It is the trustee’s fiduciary duty to act in the best interest of the beneficiaries, which entails various legal obligations. It is the fiduciary duty of a trustee to put the trust’s interests – and, by extension, the interests of the beneficiaries – before their own. Trustees must disclose how and to whom assets go straightforwardly.

One of the trustee’s fiduciary obligations is to inform beneficiaries and other parties interested in what happens to trust assets. It is generally the trustee’s responsibility to publish periodic trust accounting statements.

Trust documents specify when and how the trustee needs to provide trust accounting to beneficiaries. Trustees must provide annual accountings to each “qualified beneficiary” of irrevocable trusts. This is a requirement under California law, even when trust documents waive this obligation. Accountings must include:

  • Transactions of significance
  • The trustees’ compensation
  • Investment gains or losses
  • Trust assets’ current value

The trust’s founding documents usually require monthly or quarterly accountings. They should also include beneficiary distributions.

However, beneficiaries can request accounting and other information from the trustee at any reasonable time. Beneficiaries must have access to trust accounting upon request. Beneficiaries can also inquire about the trust’s spending and distribution of assets by asking good questions.


Trust Accounting Types

There are different types of accounting, including formal, informal, and hybrid accounting.


Formal Accounting

In formal accounting, the court will order the accountant to follow the court’s prescribed format and schedule. This can be filed by a creditor, interested party (beneficiary), or successor trustee. It is also possible for the trustee to file a petition seeking discharge and release as a trustee.

The trustee must submit an accounting after filing the petition. All interested parties may review it and file objections, if any. In addition to filing objections, discovery of documents, and depositions, the court requires a hearing. A petition to compel accounting may be time-consuming and expensive. In some cases, however, the beneficiary may have to turn to the court to make the trustee provide an accounting.


Informal Accounting

On the other hand, an informal accounting takes place when all interested parties agree that it may take place. Typically, the trustee provides the parties with detailed reports and bank statements. The trustee can also file a signed document approving the informal accounting and distribution with the court if desired.

An acknowledgment of receipt of the assets will appear on the signed instrument. It will also include a release from any claims arising from the Trustees’ actions or inactions. Additionally, it will consist of an agreement to indemnify the trustee from claims from non-signators. The distribute will receive a refund if they are not entitled to any part of the distribution. The deal will also include this.

Informal accounting is less expensive. This is because there are fewer court hearings, attorneys’ fees, and court appearances. An everyday accounting may be a good compromise if the trustee refuses to submit a formal accounting.


Hybrid Accounting

When the trustee wishes to discharge his liabilities through a court decree, a hybrid accounting may be an option. The trustee must file the signed instrument requesting a court decree if he wishes to do one. The trustee can speed up the court procedure by obtaining signed documents from all parties and waivers of citations.


Request for Estate Accounting

In the first place, any beneficiary has the right to request a formal accounting of an estate. An informal accounting might be preferable because it is less time-consuming and more economical. However, if you suspect funds are missing, a formal trust accounting may be your best option.

Trustees who refuse to provide an accounting violate their fiduciary duty. Probate code 16060 says trustees must keep beneficiaries and trustees reasonably informed about the trust.


Trust Accounts for Beneficiaries

The California Probate Code requires the trustee to deliver an accounting within 60 days of a written request from a trust beneficiary. Beneficiaries can seek the probate court’s intervention if the trustee does not comply within a reasonable timeframe. This is to safeguard their interests in trust management.


Do Trustees Have To Provide An Accounting?

Let’s review a few essential facts before you get involved in litigation. By doing so, you’ll come out on top. To understand the Trust document, we need to gather information. Consider the following when reviewing it:

  • Trustees are usually under a strict fiduciary duty to maintain accurate records. Simply put, they should inform and account to the beneficiaries.
  • If a trust beneficiary waives their rights to an account and report, the Trustee is not required to account for them.
  • Does the Trustee have any severe breaches of trust?
  • The trustee is:
  • Managing funds incorrectly
  • You deny a beneficiary’s request for information about the trust’s administration.
  • Do the Trustee’s interests come before the interests of other beneficiaries?


What Is The Reason That A Trustee Would Not Give An Accounting To Beneficiaries?

For various reasons, an accountant may violate their fiduciary duty to provide beneficiaries with an accounting. First, the accountant may have needed to do the accounting. However, they often need help to catch up or perform precise accounting.


What Is The Reason That A Trustee Would Not Give An Accounting To Beneficiaries?


A trustee may refuse to give an accounting if they know it would reveal a breach of another fiduciary duty to the trust.

Beneficiaries can also check the accounting. They can detect mismanagement, tax evasion, or embezzlement of trust assets. This is in addition to overseeing and regulating trustee actions. The trustee might need to be timelier, obscure, or refuse to provide accounting documents. They do this when they are acting poorly.


Trustee Refuses To Disburse Assets: What to Know

Does a trustee have the right to refuse to distribute assets? You should review the trust agreement if a trustee refuses to distribute an inheritance to beneficiaries. What happens if a trustee refuses to distribute assets? Under California Probate Code #16000, trustees must legally follow trust instructions.

There are guidelines to follow throughout the administration process, including distributions. Trustees are required to follow these guidelines when they distribute assets. This document outlines how and when distributions are to occur. The beneficiaries of the distribution should receive them.

If the trustee has the authority to refuse distributions or receive instructions to do the trust, they can generally refuse distributions. Trusts grant trustees the authority to decide when and how much to distribute.

Trustees can also make distributions under trusts. This can happen only after beneficiaries fulfill certain conditions or reach certain ages. Trustees must refuse distributions if beneficiaries demand them before these conditions exist.

The trustee must also consider whether the trust has adequate funding. The trustee must turn to these obligations for guidance if there needs to be more assets to cover administration costs, creditors, and taxes.

A knowledgeable trust lawyer can help you understand the trust document’s outlines and your options. Additionally, administrative issues, like property issues, can delay distribution.


Trustee Reasons for Delaying Distributions

A trust can empower a trustee to delay distribution but only gives them the authority to hold distributions for a while. What happens if the trustee refuses to distribute assets? There are three scenarios in which they may delay distributions:

  • Distributions are discretionary
  • Beneficiaries must meet certain conditions to receive their inheritances. This is according to the trust terms.
  • According to the trust terms, a trustee must distribute funds over time, not as a one-time payment.

Always consult an expert trust lawyer. Determine whether a trustee is delaying distributions in violation of their duty.


Refusal of Accounting by Trustee

Seeking counsel if you notice any of these things happening is essential.


Duties of a trustee:

The Trustee’s role outlines the scope and nature of their obligations in the Trust instrument. They must keep qualified beneficiaries of the Trust informed regarding the Trust and how it operates.

When a Trustee accepts their duties, they should inform, but not limited to, the following:

  • In the first 60 days after becoming a trustee, the trustee must provide the full names and addresses of the qualified beneficiaries.
  • If the settlor needs to know about the irrevocable trust, the trustee must notify them within 60 days.


The trustee is responsible for the following line items as part of their fiduciary obligations:

  • Any beneficiary with a reasonable request will receive documentation of the trust.
  • To prove they are faithful to the Trust, the Trustee must keep records of all transactions.

Upon receiving a copy of the trust instrument, you may be able to seek legal advice. Moreover, a statute mandates that trustees of irrevocable trusts must provide an accounting to all beneficiaries each year. They must also provide information about the trust’s end or the trustee’s change.

You should establish a system for keeping track of all receipts, capital transactions, and disbursements so you can provide supporting documentation when necessary.


What Can A Beneficiary Do If A Trustee Refuses To Give Accounting To A Beneficiary And Their Attorney?

An individual can file a petition to compel accounting with the trustee. If they refuse to provide an accounting, the individual can do this. The steps will be roughly as follows:

  • Your attorney will file a petition to make an accounting from the trustee.
  • The trustees will receive citations from the court. They must appear before the court at a specific date and time.
  • The trustee holds hearings in front of the court.
  • A 60-day deadline applies for the trustee to file his accounting.
  • You must file a petition for contempt of court if the trustee fails to do this.
  • There is another hearing date listed in the court’s citation.
  • During the hearing, the court either grants the trustee more time or removes them from their position.
  • A court may order a trustee to jail if they don’t appear and do not comply otherwise.
  • A trustee can face jail time in this case. Following this procedure, a trustee typically files an accounting to comply with the court’s order.
  • Your attorney can object to the trustee’s accounting and request additional information if money is missing from it once it goes on the record.
  • If found guilty of improperly taking trust property, the trustee must return it to the trust. This can happen through a settlement, mediation, or trial.


Is There A Time When Beneficiaries Should Contact A Trust Lawyer If They Want To Sue A Trustee?

Determining what to do if a trustee refuses to give accounting during a trust dispute can be complex. Suppose the trustee does not grant beneficiaries a right of refusal or clearly outline the distribution terms. In that case, beneficiaries can sue, usually with the help of a trust lawyer.

When trustees accept their positions, they assume fiduciary responsibilities. They adhere to a rigid legal standard. This duty includes two components:

  • Loyalty is the duty
  • Duty of care

Beneficiaries who don’t receive their distributions on time can take legal action. They can file a lawsuit, petition the probate court to remove the trustee or request an accounting. A judge will appoint the trustee’s replacement and may order them to pay:

  • The damage
  • Fees for legal services
  • Costs of court
  • Other expenses


Bottom Line

Inheriting money can be very stressful and frustrating. This happens when the trustee won’t distribute it. If a trustee refuses to distribute assets, it is sometimes straightforward what to do.

In some situations, a trustee refuses to give an accounting. In others, this refusal is a breach of duty and can signal that they are attempting to conceal misconduct, so a detailed accounting is essential. If you want to protect and receive your inheritance, you must act immediately.

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