A trust is a relationship where one holds assets for the benefit of another.
A trust may be set up for a variety of reasons. A grandfather may set one up for the distribution of his assets over a period of years to his grandchildren. The administrator of a decedent’s estate holds the funds in trust until they can be distributed to the heirs. A lawyer receiving settlement funds holds them in trust for the client. Whatever their differences, however, trusts all share the requirement of a trust accounting.
The laws of California require that trust funds be kept in a clearly-marked account separate from the personal funds of the trustee (the person managing the trust). The trustee is required to keep detailed records of money coming into and going out of the trust. According to the circumstances, he may also be required to file income tax returns or estate tax forms on behalf of the trust.
Trust accounting requirements can be complex. If you are serving as a trustee and have any questions as to your responsibilities, contact us to speak with one of our trust administration attorneys.
If you are a beneficiary of a trust, you should expect that the trust funds are properly maintained and accounted for. If you suspect wrongdoing, you may legally demand that the trustee give you an accounting. A trust attorney can accomplish this on your behalf as well bring the trustee to court for any misdeeds.