What happens at hearing when Trustee files an accounting?

Asked about 4 years ago - Santa Cruz, CA

Is the Trustee supposed to explain the accounting or just submits the report?
If a beneficiary challenges an expenditure does the Trustee’s attorney get paid more for responding to the challenge?

Attorney answers (3)

  1. Rosemary Jane Meagher-Leonard

    Contributor Level 15

    Answered . Its not clear from your post whether or not there is a pending court action involving this trust. If not, trustees are generally not required to submit the accounting to the court. However, the trustee is required to provide an accounting at least once a year until final distribution under the terms of the trust ( California Probate Code Section 16062). The code also requires the trustee to account when there is a change of trustee or when the trust terminates (Probate Code Section 16062(a)). Probate Code Section 16063 sets forth requirements for the contents of an accounting. If a trustee follows the requirements of this code section, the accounting is usually acceptable so long as everything is reported accurately and the accounting balances. If the trustee has provided you with an accounting and you object to it for any reason, you can file an action in Probate under Probate Code Section 17200 (for example).

    If there is pending litigation or a trust matter set in the Probate court, the requirements for the accounting are still the same. However, the judge may order the trustee to provide additional information or explanation of his/her accounting. If there is pending litigation in your particular case, you can also object to the accounting under Section 17200. In most California counties, where an action has been brought in Probate court, the accounting and report will be reviewed by an assigned Probate examiner. In San Diego county, where I am located, you are able to view the notes made by the examiner online. Also in San Diego county, an attorney for any party is able to speak with the examiner to discuss the notes prior to the hearing. If your matter is in the Probate court, you should check with the Santa Cruz county clerk’s office to see if the examiner notes will be posted online or whether you can see them prior to any hearing.

    Ordinarily, an attorney for the trust or trustee is paid from the trust funds. With the vast majority of trusts, the trustee has discretion to hire and contract with an attorney. As such, the attorney may be entitled to additional fees for defending the trust action depending on his/her agreement with the trustee. Under Probate Code 17211(a) and (b), either side may be charged with the attorney fees of the other if the court determines either that the beneficiary’s action in objecting to the trustee’s accounting or the trustee’s opposition to the beneficiary’s action was made in bad faith and without reasonable cause.

    I hope this information helps you. I have attached a link to the California Probate Code.
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    Disclaimer: The above answer does not create an attorney/client relationship. My responses are intended to provide general information about the question posted.

    The information provided on this site should not be used as a substitute for conferring with or hiring a competent legal advice from a licensed attorney that practices in the subject area in your state.

  2. Joseph Jonathan Brophy

    Contributor Level 20

    Answered . In the first instance the trustee files the accounting with the court and gives notice to all the interested parties - always the beneficiaries, sometimes various state officials if the trust is of a charitable nature. There is a period of time in which objections can be filed. The court may rule on the objections based on the papers submitted, or may order discovery and set the matter down for a hearing. The trustee's lawyer gets paid from the trust corpus. Those charges are subject to accountiing and may be challenged also. If a trust accounting is at all complicated a benficiary challenging the accounting ought to hire a lawyer. If the challenge is successful, the court in NY has the right to order the trust to pay the beneficiary's legal fee from the trust. I am not sure whether that is the case in CA since I don't actively practice there. You need to discuss all these issues with a lawyer in your area, experienced in the field. Bring money, such services can be expensive.

  3. Rosemary Jane Meagher-Leonard

    Contributor Level 15

    Answered . I apologize. I neglected to attach the link to my post. Please see the link below.

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