How the trust account works
Start with what the trust held on the first day of the period, at its carrying value: the value at the date of death for a first account, or the closing figures of the last account. Then record each receipt and payment, each sale and each distribution.
Every entry is principal or income. The account keeps two balances: for principal, and separately for income, what you started with plus receipts and gains must equal what you paid out, distributed and still hold. If either side is off, something is missing or entered twice.
The tool does not decide what is principal and what is income. That follows the trust document and your state's principal and income act. Each type starts at the usual rule, and you can change any entry. In California, when income cannot cover the trustee's and agents' fees, property tax or ordinary upkeep, the rest comes from principal, and the entry shows the split.
Example: Ruth Moreno's living trust held a house, a CD, a stock fund and a checking account when she died. In the first account the house sold for a gain of $17,315.60, $6,023.47 of income came in, and her two children received $609,800.00 of principal, including her car. Principal charges and credits both come to $878,422.48, and $824.47 of income is left at the end. Open Ruth's trust account.
Questions successor trustees ask
What has to be in a California trust accounting?
Probate Code section 16063 lists it: receipts and disbursements of principal and income for the period, the trust's assets and liabilities at the end, the trustee's compensation, the agents the trustee hired with their relationship and pay, and two statements about the beneficiary's rights. The printed account has all of them.
How often does a successor trustee have to account?
In California, at least once a year, when the trust ends and when the trustee changes (Probate Code 16062), to each beneficiary who can currently receive income or principal. A living trust created by a document signed before July 1, 1987 is exempt (16062(b)). The trust document or a beneficiary in writing can waive it, within the limits in 16064.
Is it principal or income?
Interest, dividends and rent are usually income. Sale proceeds, capital gain distributions and money added to the trust are principal, and the trustee's regular fee is half each. These starting choices follow California's principal and income act. While the trust is settled after the death, attorneys', accountants' and trustees' fees may come from either, at the trustee's discretion (16370(c)(2)). The trust document comes first.
My trust is not in California. Does this still work?
States that use the Uniform Trust Code (section 813) ask for a yearly report of the trust property, liabilities, receipts and disbursements, the source and amount of the trustee's compensation, and the assets with market values where feasible. This account covers those. Choose Another state to leave out the California statements.
What is carrying value?
The value an asset is carried at: its value at the date of death for a first account, its value in the last account after that, or its cost if the trust bought it later. Gains and losses on sales are measured against it. Market values at the end are shown beside it.
Is this the same as a lawyer's client trust account?
No. This page is for the successor trustee of a living or family trust, accounting to its beneficiaries. A lawyer's client trust account (IOLTA) is a different thing with its own State Bar rules.
Can I file this with the court?
An account filed for court approval in California follows Probate Code sections 1060 and on and the court's own requirements (16063(b)). This page makes the account you send to the beneficiaries. Take advice before filing anything.
Where are my figures kept?
Only in this browser on this device, saved as you type. Download a backup file now and then: it opens on another computer, or here if the browser's data is ever cleared.
Sources: California Probate Code 16062, 16063, 16064 and 16460; principal and income: 16340, 16343, 16344, 16345, 16360, 16361, 16365 and 16370; Uniform Trust Code section 813 as enacted in Ohio Revised Code 5808.13 and Kansas Statutes 58a-813. The people in the example are made up. This is a bookkeeping tool, not legal or tax advice.