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A Trustee’s Duty to Account

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One of the primary responsibilities of the trustee of a trust is to manage the trust’s assets for the benefit of the trust’s beneficiaries in accordance with the terms of the trust. The trustee has a duty to keep beneficiaries informed of the trust’s financial activity so that the beneficiaries can understand how that the trust’s assets are managed. The trustee fulfills their duty to inform beneficiaries by providing them with a trust accounting report on a periodic basis. Many trusts require accountings on an annual basis.

What is a trust accounting report?

That can depend on what is specified by the terms of the trust and the type of assets held by the trust. Sometimes, a trust accounting report can be as simple as copies of bank statements showing funds moving in and out of the trust. Other times, trustees are required to provide a formal accounting report of all the trust’s assets and the detailed activity that has occurred during the accounting period.

Information that is commonly provided in trust accounting reports includes payments made for taxes, for professional services such as attorneys, CPAs, and financial advisors, and for compensation and reimbursement of the trustee. If the assets of the trust are held in investment accounts, the changes in the value of such accounts will be recorded. Lastly, any distributions made to beneficiaries will be disclosed.

Trust Administration Services at WCN

Trust administration and accounting can be complicated and time consuming, and Trustees may be held personally liable for ensuring that a trust is properly administered. If the oversight of trusts and the requirements of accounting reports become overwhelming, we invite you to call our offices at (781) 235-5500 or contact us for assistance. At Wilchins Cosentino & Novins LLP, our Private Client Services practice includes experienced professionals who can help with preparing such accounting reports, filing taxes or paying bills, calculating distributions, or even provide help with determining your fiduciary duties by working with you as co-trustee of the trust. We look forward to serving you.

Lyndsey Nielsen is a Trust Accountant in the Private Client Services practice.

This article is not legal advice and should not be taken as such or relied upon as legal advice.