What Is a Trust Accounting and When Can Beneficiaries Demand One?

A trust accounting is the trustee's formal financial report: what the trust owned at the start of the period, every receipt and disbursement, gains and losses, trustee and professional fees, and what remains at the end. It is the primary window beneficiaries have into how the trustee has handled the money.

Under Probate Code section 16062, trustees of irrevocable trusts generally must account at least annually, at the termination of the trust, and on a change of trustee, to each beneficiary entitled to distributions. Beneficiaries can also demand information and, if the trustee refuses to account, petition the probate court to compel one. The accounting carries a powerful clock: a properly served account that includes the required legal notice generally starts a three year limitations period for claims disclosed in it, so reviewing accountings promptly is not optional.

Accounting litigation follows a familiar arc: compel the accounting, dig into the backup documents, then file objections seeking surcharge for improper fees, below-market transactions, missing assets, or self-dealing. Courts can order the trustee to repay losses personally and deny or claw back their fees.