Seeking An Accounting From A Trustee
As a fiduciary, one of the basic requirements of a trustee is that they always be 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, the debts, the income and expense during the period of the accounting, and any other information that would assist the beneficiaries in understanding the financial status of the trust.
Some trust agreements require annual accountings, while others only require accountings when a beneficiary requests it. In either instance, the accounting must cover the entire period from the last accounting (or the beginning of the trust if no prior accounting has been prepared) up through the date of the request for the accounting. The Trustee is required to produce all of the bank statements and evidence showing how he has spent the trust’s assets.
Time and time again, litigation arises over the accounting of a trustee. As the first step, a beneficiary must make a demand in writing for the trustee to produce an accounting. If the trustee fails, then the beneficiary can ask the court to compel the accounting. Whether the trustee likes it or not, he is always going to have to produce an accounting. As in other areas, the accounting can either make or break a trustee’s case. The accounting will either show that he has done his job correctly, or it will reveal that he has failed to properly act. In either case, having skilled attorneys who understand the accounting requirements for a trustee is important.
The Litigation attorneys at Ford + Bergner LLP have represented countless clients in litigation involving fiduciary accountings. 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 if you are involved in Trust Litigation.