Seeking an Accounting from a Trustee

As a fiduciary, one of the basic requirements of a trustee is that they are always prepared to produce an accounting of the trust assets. The Texas Trust Code lays out the requirements that must be included in a trustee’s accounting. 

For instance, the trustee must list the assets, debts, income, and expenses during the period of the accounting, and any other information that would assist the beneficiaries in understanding the financial status of the trust.

If you need to seek an accounting or have questions about whether a trustee is fulfilling their duties, call Ford + Bergner LLP today at 713‑322‑4923 to protect your rights and ensure the trust is being managed properly.

What Is a Trustee Accounting, and Why Is It Important?

Trustee accounting refers to a report of all actions taken with regard to the assets in a trust. The trustee accounting document contains bank account statements, along with receipts and disbursement records, as well as other currently held assets. The accounting provides a window into the administration of the trust for the beneficiaries.

Information included in a high-value trust accounting can help uncover potential wrongdoing or ensure that a trustee has been acting in a fiduciary manner. As either a trustee or a beneficiary of a trust, it is important to understand the accounting process to protect the assets in a trust as well as your legal rights.

Are Trustees in Texas Required To Provide Annual Accountings?

Not every trust is subject to annual accounting. In Texas, a trustee’s duty to provide an accounting and how often they must do so depends on the language of the trust. The trust may require accounting on an annual basis or may only require accounting upon the written request of a beneficiary.

Each accounting must encompass the full period between the last accounting date or the trust’s inception date and the date of the present request. Trustees may also include supporting documents, including:

• Bank statements
• Receipts
• Invoices
• Records showing financial gains and/or losses

Can a Trustee Be Removed for Failing to Account?

Beneficiaries who are denied an accounting without good reason may have cause to seek removal of a trustee through court proceedings. In addition to removal, the court may levy legal penalties if the trustee is found to be in violation of fiduciary obligations.

In large estates with substantial value, small mistakes may lead to serious questions about a trustee’s ability and ethical standing. Our lawyers from Ford + Bergner, LLP can offer assistance if you’re unsure how to proceed.

What Happens if the Trustee Refuses To Provide an Accounting?

If a trustee will not voluntarily give an accounting after a beneficiary has made a written request, then the logical next step is to petition the court to order it. Beneficiaries have a right to demand an accounting under Texas law, and a trustee cannot go around that right.

A trustee must ultimately share financial records to demonstrate trust management, regardless of their willingness. In many cases, accounting becomes the focus of litigation. The accounting may either verify that the trustee has done nothing wrong or may reveal mismanagement, which could lead to their removal and liability.

What Should a Beneficiary Do if They Suspect the Trustee Is Mismanaging the Trust?

If you think a trustee is not administering a trust properly, act quickly. Request an accounting in writing. Accounting should include all income, expenses, and financial transactions affecting the trust. A court order may be necessary if the trustee denies access to entitled information or the accounting shows signs of unexplained losses and improper asset management.

Beneficiaries in Texas may file a petition in probate or civil court for an order compelling an accounting or for removal of the trustee. Breaches of fiduciary duty are taken seriously by the courts, and trustees who mismanage trust assets can be held personally liable for those losses. Our legal team at Ford + Bergner, LLP can help ensure that your rights are protected.

Contact Ford + Bergner, LLP Today

Our litigation attorneys at Ford + Bergner, LLP have represented countless clients in disputes involving fiduciary responsibilities. We have represented the parties seeking to hold a trustee accountable, and we have represented the trustees seeking to prove that they have done their jobs correctly. In either case, please contact us at 713‑322‑4923 if you are involved in trust litigation.