Records, receipts, and the accounting trail

Separate and designated

§16009 has the trustee keep the trust property separate from other property not subject to the trust, and see that the trust property is designated as property of the trust. A trust account in the trust's name, with no personal money passing through it, is the plainest way to keep that record clean.

What the account will need

The account §16062 calls for draws directly on the records. §16063 lists what it shows: receipts and disbursements of principal and income for the period, the assets and liabilities at its end, the trustee's compensation, the agents hired with their relationship to the trustee and their compensation, and the two statements — the right to petition the court for review (§17200) and the three-year limit on claims for breach of trust.

Principal and income are separate columns, allocated under the Uniform Fiduciary Income and Principal Act (§16320 and following), because they belong to different beneficiaries.

Why receipt dates matter

California's limitation for breach-of-trust claims runs from what a beneficiary receives: a claim adequately disclosed in an interim or final account or other written report is barred three years after the beneficiary receives it, and an undisclosed claim three years after the beneficiary discovered, or reasonably should have discovered, it (§16460). The date a report was received is therefore part of the trustee's own record.

An instrument may set a procedure that releases the trustee if a beneficiary does not object to an item within a stated period — effective only with a period of at least 180 days and the boldface notice §16461(c) prescribes, and never for intentional, grossly negligent, bad-faith or reckless breaches (§16461(b)).

Receipts at the end

At termination the trustee accounts once more (§16062). A beneficiary's voluntary release or receipt is a document whose effect depends on what was disclosed, and a distribution the instrument requires may not be conditioned on one (§16004.5). Preparing those documents is attorney work, not a form download.

The statutes, verbatim

• Duty to keep trust property separate and designated

  Prob. Code §16009 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Contents of an account

  Prob. Code §16063 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Limitation on claims for breach of trust

  Prob. Code §16460 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

• Exculpation and the instrument's objection procedure

  Prob. Code §16461 ↗

  Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.

Common questions

Frequently asked questions

What records should a California trustee keep?

Enough to produce the account §16063 describes: receipts and disbursements of principal and income, assets and liabilities, the trustee's compensation, and each agent with the agent's relationship and compensation — with the trust's property kept separate and designated as the trust's (§16009).

How long can a beneficiary bring a claim in California?

Three years after receiving an account or written report that adequately discloses the claim, or three years after discovering it where nothing disclosed it (§16460).

Does an account have to include a notice?

Yes: §16063(a)(5)–(6) requires a statement of the right to petition the court for review and a statement of the three-year limit on claims; an instrument's objection procedure works only with the notice §16461(c) prescribes.

General information about California law, not legal advice.