“Thought for the Day” #740 – by Stephen R. Elville, J.D., LL.M.

June 14, 2016

Trust and guardianship accounting does not have to be difficult since, in quite a few cases, the trustee or guardian only has to worry about one or two bank accounts.  This type of cash accounting is basically the same as keeping a balanced check book.  The trustee or guardian simply records all transactions and makes sure they match the monthly bank statement.  Typically once a year, the trustee or guardian itemizes all of the transactions and provides a report to the beneficiary or court explaining how the funds were spent and how much money remains.  Court approval may or may not be required, depending on the situation.  The same principles apply to trustees accounting for more substantial trusts, although in those cases the trustee usually has to account for investment gains and losses as well as typical expenditures.  If the trust is large, it may make sense to hire an attorney or accountant to make sure the accounts are properly prepared because complexity will likely increase where multiple investments are involved.