Trust accounting is a detailed record, a financial story, that includes information about all income and expenses of a trust. Trust accounting is important because it helps fulfill your duty as a trustee to keep beneficiaries fully informed of the status of the trust administration.
To properly account to the beneficiaries of the trust, a trustee needs to maintain detailed records that adequately reflect:
- Persons hired by the trustee
Moreover, records related to asset values as well as transactional invoices and receipts need to be properly stored. This record should contain some basic information such as, who has received money from the Trust account, what they have purchased with the amount of money, and when and from whom the amount was withdrawn.
Follow the California Probate Code
The California Probate Code includes rules for trust accountings. These are not the same accounting rules as used for bookkeeping purposes. If your trust is to be submitted for court approval, it is important you employ a trust accountant that understands the needs, requirements, and regulations of Probate Code. Accountants must file reports to the court which includes every transaction made from your trust account.
Trust 101 Series
If you’ve been following our Trust 101 Series, then you should already have a good knowledge of what it takes to oversee a trust account. If you’re new to our series on trust accounts, be sure to check out other videos in this series. In this series, we’ve discussed:
- How you can become a Trustee
- First Steps as a Trustee
- Collecting Assets
- Liquidating Assets
- Appraising Assets
- Paying Bills as a Trustee
If you are a trustee or represent a trustee and want help with a trust accounting, please contact us to discuss your situation.