California Trust and Estate Accounting Requirements
Current as of September 2026. General information, not legal or tax advice.
California imposes one of the most detailed statutory accounting duties in the country. A trustee’s obligation to account arises under Probate Code section 16062, the required contents are specified in section 16063, and accountings presented in court proceedings must follow the format prescribed by Probate Code sections 1060 through 1064. Together these sections define a document with a particular structure, not a spreadsheet of transactions.
Who must provide an accounting in California
Trustees must account at least annually, at termination of the trust, and on a change of trustee, to each beneficiary entitled to income or principal. Personal representatives must file accountings in estate administration, though section 10954 dispenses with the account entirely where every person entitled to distribution has waived. Conservators and guardians must account to the court, generally at one year and periodically thereafter. Section 16062 contains exceptions, including trusts revocable by a living settlor and certain beneficiary waivers. A waiver of accounting does not waive the underlying fiduciary duty, and under section 16064 the court may still compel an account on a showing that a material breach is reasonably likely.
What a California trust accounting must contain
Probate Code section 16063 requires a statement of receipts and disbursements of principal and income for the period; a statement of assets and liabilities at period end; the trustee’s compensation; the agents hired by the trustee, their relationship to the trustee, and their compensation; a statement that the recipient may petition the court to review the account under section 17200; and a statement that claims for breach are barred three years after receipt of an account disclosing the facts. For accountings filed in court, sections 1061 and 1062 additionally require a summary of account and supporting schedules in a prescribed order, with charges and credits reconciling to the property on hand at period end.
Income and principal allocation in California
California’s principal and income act is the Uniform Fiduciary Income and Principal Act, enacted at Probate Code section 16320 and following, effective January 1, 2024. It replaced the earlier act in its entirety, so allocation analysis written against the prior law needs to be redone rather than adjusted. Capital gains are generally allocated to principal, subject to the trustee’s power to adjust between income and principal where the default allocation would defeat the trust’s purposes. Depreciation on income-producing real property may be charged against income within statutory limits. Directly held business interests are accounted for under separate-entity rules rather than by allocating gross receipts. Retirement account distributions carry allocation treatment that frequently surprises trustees, because the income tax character and the fiduciary accounting character diverge.
Filing an accounting with the California probate court
Court accountings follow the summary-and-schedules format set out at sections 1061 through 1063. Section 1061 prescribes the summary itself: charges comprise property on hand at the beginning of the period, additional property received, receipts, gains on sale and net income from a trade or business; credits comprise disbursements, losses on sale, net loss, distributions and property on hand at the close. Total charges must equal total credits. Section 1062 requires the supporting schedules, with distributions and property on hand stated at carry value. Section 1063 adds further schedules, including estimated market value at period end and, where there is an income beneficiary, an allocation of receipts and disbursements between principal and income. Local rules vary meaningfully by county. Los Angeles, Orange, San Diego, and the Bay Area courts each maintain probate policy manuals with additional formatting and exhibit requirements. Confirm the local rule before filing.
When a California accounting is contested
Beneficiaries petition the court to compel, review, settle, or surcharge. Once objections are filed, the accounting becomes an evidentiary document: carry values, allocation decisions, and the adequacy of supporting records all come under examination. The most common defect we see is the confusion of carry value with market value, which sections 1062 and 1063 require to be reported separately and for different purposes. Reconstructing an inadequate record after objections are filed is substantially more expensive than preparing a defensible accounting the first time.
How T.E.A. Fiduciary helps
We prepare California trust, estate, and conservatorship accountings in court format, with the schedules and carry-value tracking the court expects, as a licensed, insured CPA firm practicing fiduciary accounting exclusively. We do not prepare tax returns. We work alongside your attorney and your tax preparer so that the accounting and the Form 1041 agree.
This page provides general information about California fiduciary accounting requirements and is not legal or tax advice. Statutes and local rules change; confirm current requirements with counsel.
