An accounting is a formal statement of what the trust started with, what came in, what went out, and what is left. Beneficiaries are entitled to one, and a trustee who cannot produce it is in a weak position regardless of how honest they were.
Most family administrations end with signed waivers instead of a formal accounting. That is normal, and occasionally it is a mistake.
What an accounting contains
- The property on hand at the start of the period, with values
- Receipts, meaning income and any other money coming in
- Disbursements, itemized, including fees paid to the trustee and to professionals
- Gains and losses on the sale of assets
- Distributions made to beneficiaries
- Property on hand at the end, which has to reconcile to the first figure plus and minus everything above
It has to balance. That is the whole discipline. A summary of activity that does not tie out is not an accounting, it is a narrative, and beneficiaries' lawyers can tell the difference in about ninety seconds.
Beneficiaries entitled to information can request an accounting, and if a trustee refuses, they can petition the court to compel it. A court that has to be asked twice tends to form a view about the trustee before hearing anything else.
The burden is on you, not on them
When records are missing, the doubt is resolved against the trustee. A beneficiary does not have to prove you misspent anything. They have to point at a gap, and you have to explain it. That asymmetry is why the shoebox of receipts matters more than anyone's good intentions.
Waivers, and when to refuse one
In a straightforward family trust where the beneficiaries are cooperative, everyone signs a waiver of accounting and the administration closes cleanly. That is the common path and it is often right.
Where I hesitate is any file with a beneficiary who has been difficult, a trustee who is also a beneficiary, or a significant judgment call in the record such as a sale to a relative. In those, an actual accounting followed by written approval buys the trustee protection that a bare waiver does not. It costs more now. It costs far less than a petition to compel in year three.
“I have been asked more than once to prepare an accounting for a trustee who kept no records at all. What we produce in that situation is a reconstruction, it is expensive, and it never looks as good as contemporaneous records. Keep the ledger from day one. I cannot make the past tidy.”
Delia Vasquez-HartA trustee can petition the court to settle an account. The court reviews it, beneficiaries can object, and an approved account generally cuts off later claims about the period covered. Trustees use this when relations have broken down or when the administration was complicated enough that finality is worth paying for.
Questions we get asked
How often do I have to account?
The trust may specify a schedule, often annually. Absent that, expect to account at least at the end of the administration and whenever a beneficiary reasonably requests it.
Do I have to disclose my trustee fee?
Yes, it is a disbursement and it appears on the accounting. Fees taken quietly are the item beneficiaries scrutinize first.
Does an accounting have to be prepared by an accountant?
Not necessarily. It has to be accurate and in the required format. Attorneys and fiduciary accountants both prepare them, and a CPA is worth involving when there is business income or complicated tax activity.
What if a beneficiary objects to my accounting?
Objections get resolved by agreement or by the court. An objection is not a finding of anything, but it does mean the file has entered a phase where your own counsel matters.
Export every transaction from the trust account into a spreadsheet with a category on each line, starting now rather than at the end. Bring that file in and we will tell you whether you are heading toward a waiver or a formal accounting.