In mid-April, a California Superior Court judge ruled that a trustee must provide a formal accounting for his acts as trustee that occurred during the trust creator’s life. The case was filed in the fall of 2012 by one of the trust’s beneficiaries. The beneficiary had requested an accounting from the trustee. Unfortunately, the trustee refused to provide it.
During the hearing, the beneficiary argued that, under California law, a trustee must account for all trust administration that took place during the life of the trust creator. In his defense, however, the trustee argued that the trustee should only be required to account for actions taking after the death of the trust creator. The California Probate Code does not grant beneficiaries a right to a trust accounting the lifetime of the trust creator. The beneficiary was also not a “vested beneficiary” as defined by the Code.
The judge, however, considered recent California Supreme Court cases when issuing a decision. These cases held that a trustee is required to account to trust beneficiaries for transfers that occurred during the life of the trust creator, once the beneficiaries become vested. As such, the rights of conditional beneficiaries mature into present and enforceable rights once those beneficiaries become vested in the trust assets. This includes the right to a pre-death accounting.
To learn more about the obligations of a trustee during a trust administration, contact the experienced Anaheim estate planning attorneys at the Law Office of James F. Roberts & Associates, APC. Call our office today at (714) 459-5481.