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Accountings

Accountings. Generally. Purpose = Allow beneficiary to obtain information to see if trustee is breaching duties . Some states require annual accountings even without request or court order. Who may request an accounting?. 1. Beneficiary -- § 113.151(a) Written demand to trustee.

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Accountings

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  1. Accountings

  2. Generally • Purpose = Allow beneficiary to obtain information to see if trustee is breaching duties. • Some states require annual accountings even without request or court order.

  3. Who may request an accounting? • 1. Beneficiary -- § 113.151(a) • Written demand to trustee.

  4. Who may request an accounting? • 1. Beneficiary -- § 113.151(a) • Written demand to trustee. • Trustee must provide accounting within 90 days.

  5. Who may request an accounting? • 1. Beneficiary -- § 113.151(a) • Written demand to trustee. • Trustee must provide accounting within 90 days. • If trustee does not, any beneficiary may sue.

  6. Who may request an accounting? • 1. Beneficiary -- § 113.151(a) • Written demand to trustee. • Trustee must provide accounting within 90 days. • If trustee does not, any beneficiary may sue. • Court may award beneficiary’s attorney fees and court costs against trust or trustee personally.

  7. Who may request an accounting? • 1. Beneficiary -- § 113.151(a) • Written demand to trustee. • Trustee must provide accounting within 90 days. • If trustee does not, any beneficiary may sue. • Court may award beneficiary’s attorney fees and court costs against trust or trustee personally. • Only one accounting per 12 months unless court orders more.

  8. Who may request an accounting? • 2. Interested Person -- § 113.151(b) • File suit. • Court will order accounting if it finds the interested person’s interest warrants an accounting.

  9. Contents of Accounting -- § 113.152 • 1. All new trust property not previously accounted for.

  10. Contents of Accounting -- § 113.152 • 2. Account of all: • Receipts • Disbursements • Other transactions • Source and nature of each • Show income and principal separately

  11. Contents of Accounting -- § 113.152 • 3. List and description of all trust property.

  12. Contents of Accounting -- § 113.152 • 4. Cash balance on hand and where kept.

  13. Contents of Accounting -- § 113.152 • 5. All known liabilities

  14. Settlor’s Ability to Alter Accounting Rules • 1. Settlor may require accountings at a stated time, interval, or event.

  15. Settlor’s Ability to Alter Accounting Rules • 2. Total waiver of accountings not allowed • Against public policy • Without accountings, beneficiaries unable to ascertain if trustee in breach

  16. Settlor’s Ability to Alter Accounting Rules • 3. Limitations allowed under § 111.0035(b)(4)(A): • Trust is revocable • Beneficiary of irrevocable trust is remote: • Not entitled to current distribution. • Not entitled to distribution if trust ended now.

  17. Advice • 1. Keep trust records in accounting form from Day 1. • 2. Render regular accountings even if not asked. • 3. Respond to accounting requests promptly.

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