Information Download: Trust accounting vs. Trust information, which is better?

In this video, partner Keith A. Davidson discusses the difference between a Trust accounting and Trust information. Sometimes, a full-blown accounting is not required. (12/10/2020).

The following is a transcript of this video:

In this video, I want to discuss how long should you wait before you request a trust accounting.
So let’s say the settlor has passed away. You’re now a beneficiary of the trust and you’d like to know a little about the trust assets but nobody’s telling you anything. How long do you have to go before you request a trust accounting? Well, generally speaking, you’re going to have to wait at least six months to get a trust accounting. So, from whenever the new trustee takes over to six months later, that’s when you would request your first accounting.

In some instances you might even have to wait a year. Depends on the nature of the assets and the nature of the trust and also depends on what the trust terms say. But, there’s something else that you’re entitled to much sooner than six months and that’s information.

So an accounting is one thing. An accounting is something a trustee prepares. It’s kind of formalistic. It lists out the income and the expenditures and the distributions and all that.
Information is much easier. So you can go in and say look, I’m not asking for an accounting right now, but what I would like is copies of all the bank statements. Copies of all the brokerage statements. Copies of the rent roles, showing how much rent is collected on the rental real property. Just give me some idea of what’s in this trust. And that’s something the trustee should be able to give you within a reasonable time. Meaning, a couple days. And you can request that immediately. As soon as the new trustee takes over, you have a right to say inform me. Keep me informed. The trustee has a duty to keep you reasonably informed. They’re supposed to do that without you even asking. But, certainly when you ask, they’re supposed to give you reasonable information within a reasonable amount of time.

So once something happens and a new trustee takes over, you should simply asked to get copied on all the bank accounts. Not only that, but a good trustee, and this happens a lot with corporate trustees, they literally will send out copies of the bank statements monthly. They’ll put your name on there so that when the bank statements go out, they go to the trustee and they go to the beneficiary or beneficiaries and it’s a great idea to do that for a trustee, because it shows that you’re being transparent. It shows full disclosure. You as a trustee are going to look completely reasonable in everything you do when you have that type of transparency.
So as a trust beneficiary, an accounting is fine, but I would start with information. And I would say give me all the information you have. Let me see the finances, let me see the bank statements, let me see the brokerage account statements and I’ll look at them myself. And they don’t have to be in accounting form. I just want to see what’s there, how much money is there. What kind of investments are there? And then just keep giving me those statements every month and I can just track them myself. And that way, at least I’ll have an idea of what’s going on.
And then, eventually, six months to a year later, you will be able to demand and hopefully receive an accounting, if you have a good trustee. But that’s down the road and that’s not something that you need to do from day one. So don’t forget, there’s a big distinction between accountings and information. Information isn’t as organized and put together as neatly, but you can get it must faster. You’re entitled to it much sooner and you should go out and ask for it immediately.