A California fiduciary, whether acting as trustee, executor/administrator, or conservator, is required to account to the beneficiaries. Consequently, a fiduciary is vulnerable to beneficiary attacks if they fail to properly account.
If you are a Trustee, an accounting can be a shield you use to fulfill your legal obligations by sufficiently informing the beneficiaries about the trust and about your actions. Also, an accounting can be a sword, where the Trustee files the accounting with the court seeking judicial approval of their actions and eliminating future lawsuits. Regardless of your purpose, an accounting is necessary to complete administration of the trust.
Breach of Fiduciary Duties:
Trustees who ignore or intentionally avoid their obligations to account are often trying to conceal their mismanagement of the trust estate. Viable suspicions about a Trustee’s mismanagement include the following:
- Failing to account
- Fraudulent accounting
- Misappropriating funds
- Depositing funds into a personal account
- Failing to pay known debts or liabilities
- Treating the Trust like a personal ATM
- Failing to honor the Trust’s terms
- Failing to make distributions, or
- Making imprudent investments
If you are a beneficiary, a Trustee’s accounting is the starting point to determine if the Trust was properly managed. A beneficiary who is “left to guess” about a Trustee’s decisions, can file a petition with the court demanding an accounting. The court will order the Trustee to account and the filed accounting will disclose the financial information of the Trust and the Trustee’s decisions. If the Trustee has breached the trust and caused damages, then the Court can hold him or her liable for losses caused by the breach.
Peace of Mind
A proper accounting that reveals the Trustee fulfilled his or her legal obligations will eliminate the beneficiary’s concerns about the trustee’s mismanagement and give the beneficiary peace of mind that his or her interest is safe.
If you are a trustee, who needs guidance and professional advice, or you are a beneficiary, who wants to know what your legal rights are and how to protect your inheritance, please call the Perryman Law Firm. No matter how simple or complex your legal issues are, we have the experience and tenacity to help you.
noun | \sək-'ses\ | [suc-cess]
A performance or achievement that is marked by success, as by the attainment of honors.