Does a New York City Trustee Have to Provide a Yearly Accounting or Report?

A trustee takes on a lot of responsibility when they are appointed, from making sure they make good investments to keeping trust property protected from loss. One of the most important things that a trustee should take on is to make sure that they properly understand what kind of record-keeping they must do and when they should provide an accounting of what has been done with the trust. Because of the importance of making sure that an accounting and other trustee responsibilities are done right, everyone named as a trustee should hire an experienced New York City estate attorney to advise them on what duties have to be performed in order to keep out of legal trouble with the courts and beneficiaries.

Proper record-keeping is essential for every trustee, both for tax purposes and because beneficiaries or the courts could ask any time for an accounting of the trust. This means that things such as bank account and investment account information, canceled checks, proof of the purchase or sale of any property or any other financial information should be held on to for the life of the trust.

Failure to provide good accountings could lead to trouble for a trustee and possibly cause them to be at the end of litigation by the beneficiaries of the trust. While state law usually provides that trustee needs to provide an accounting on demand, it is the wisest course of action to simply provide a trust accounting every year whether it is asked for or not. This is because the trustee still has a duty to at least provide basic information to the beneficiaries about what is going on with the trust and leave them “in the loop” about what actions are being taken by the trustee. Full transparency from the trustee could lead to more protection to that trustee as they are being open about what they are doing with trust assets and they are providing proof of what they are doing or not doing with the trust.

Failure to provide regular accountings and to keep the trust’s book in order could lead to many problems with the trustee. The court does not look kindly on a trustee who has not kept good records or has failed to provide an accounting when asked, meaning that the trustee could end up being removed from their position or possibly become liable for issues that arise from not properly investing or protecting estate assets.

Through hiring a New York estate attorney, a trustee can make sure that the handling of trust assets is done in a proper manner and is properly documented. Having an attorney advise a trustee greatly diminishes the change of the trustee ending up in front of a judge because of angry beneficiaries. If you are a trustee who needs the advice of a New York City estate and trust attorney, call the Law Offices of Albert Goodwin at (212) 233-1233.