Klosek Law Offices

WHAT IS TRUST ACCOUNTING?

State laws require legal trust accounting for trust accounts. In California, your beneficiaries should be kept reasonably informed regarding the trust and its administration if you have a trust account for an estate or trust.

At least once a year, as well as at termination of a trust and whenever the trustee changes, trustees are required to inform beneficiaries about the assets in trust and how they have been used.

HOW OFTEN DO TRUSTEES NEED TO ACCOUNT?

California Probate Code 16062 gives beneficiaries the right to demand an accounting at least annually from the trustees. Trustees must also provide an accounting within 60 days if a trust beneficiary demands an accounting in writing.

WHAT IS TRUST ACCOUNTING INCOME?

“Trust accounting income” formula is one of the methods used to determine how much income is available for distribution to beneficiaries by the trustee. A trust’s TAI is calculated by adding all sources of income together and subtracting all expenses. The TAI formula will also be used to prepare the tax returns of the trust in certain circumstances.

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