Trust Accounting
What is trust accounting? Trust accounting protects beneficiaries against negligent or underhanded trustees, but it also provides essential protection for trustees against liability. In simple terms, trust accounting is a window into how a trustee is administering the trust. But that’s only telling part of the story. At Bryant & Associates CPA, we have prepared accurate and compliant accountings for decades.
What is Trust Accounting?
A trust accounting in California is a record that outlines the financial story of how a trustee is administering a trust. This type of accounting details all information regarding the income and expenses of trust and helps determine tax requirements.
Who is Responsible for Trust Accounting?
Now, you likely want more information if you are asking, What is trust accounting? It’s also important to understand who is responsible for preparing an accounting. All trustees are responsible for preparing an accounting for current beneficiaries.
Still, keep in mind that trust accounting is also a form of defense for trustees. A compliant trust accounting helps protect trustees from liabilities, so working with an expert trust accountant is essential.
When Do You Need to Prepare Trust Accounting?
When you must prepare a California trust accounting depends on your situation. Trustees must prepare an accounting at least annually. But depending on your circumstances, you may have to prepare one more frequently.
Still, trust accounting isn’t a singular act. To ensure your record is accurate and compliant, continuous bookkeeping is crucial.
What Should Trust Accounting Include?
Understanding what this record should include is integral to answering the age-old question: What is trust accounting? As we discussed, this is a comprehensive record of how a trustee is administering a trust. A trust accounting in California should include:
- An account statement with all principal and income held by the trust
- A detailed breakdown of assets/liabilities
- Trustee compensation
- A report of the agents a trustee hired
- A legal statement that beneficiaries can object to the trust accounting
- A statement that beneficiaries cannot make claims against trustees after 180 days from the date they receive an accounting
Also, you have to ensure you adhere to the needs, requirements, and regulations of the California probate code.
Expert California Trust Accounting
So, now you know everything you need to understand the answer to the question, What is trust accounting? Working with a professional trust accountant is essential to reduce liability, minimize work, streamline the process, and avoid costly litigation and penalties. At Bryant & Associates CPA, we have provided premier trust accounting services in California for decades. With us, compliance and accuracy are never a question.
Contact us to learn about our trust accounting services.