FIRST TRUST ACCOUNTING · CALIFORNIA

The first trust accounting after the settlor's death — done right.

First accountings for successor trustees under California Probate Code §16063. Establish the baseline. Reconcile to statement-of-record. Distribute confidently.

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What we do

When a revocable trust becomes irrevocable — most commonly on the settlor's death — the successor trustee steps into a fiduciary role with duties that did not exist under the settlor. Chief among them: the duty to account.

Under California Probate Code §16062, the successor trustee must account at least annually. Under §16063, the accounting must include a statement of receipts and disbursements, a statement of assets and liabilities at period end, a statement of the trustee's compensation, and a description of agents hired. The first accounting is the most consequential — it establishes the baseline value of the trust, resolves the allocation between principal and income under the Uniform Principal and Income Act (California version), and sets the schedules that every subsequent accounting reconciles from.

Get it wrong and every future accounting inherits the error. Get it right and the trust runs cleanly for years.

We prepare first accountings for California trusts that have just become irrevocable — for successor trustees who inherited the role, for professional fiduciaries taking over, and for institutional trustees stepping in. Boring, complete, and easy to check.

Who this is for

Family successor trustees — the child, sibling, or family friend named in the settlor's trust and now facing a §16063 duty.
Professional fiduciaries and PFAC members taking over administration.
Institutional trustees stepping in when the family member declines.
Estate-planning attorneys who need a CPA firm to prepare the first accounting while counsel handles beneficiary notice under §16061.7 and any petition work.

Deliverables

Opening balance sheet — trust assets and liabilities valued at the settlor's date of death (basis step-up date under IRC §1014).
Schedule of Receipts — income earned since date of death, categorized by source.
Schedule of Disbursements — administration expenses, taxes, distributions.
Schedule of Assets on Hand at accounting period end.
Principal vs. income allocation under the California Uniform Principal and Income Act.
Trustee compensation and agent disclosures per §16063.
Indexed workpaper packet delivered via encrypted Egnyte.

Frequently asked

Q: When is the first trust accounting due after the settlor's death?

A: Under California Probate Code §16062, a trustee must account at least annually. The first accounting typically covers the period from the settlor's date of death through the first anniversary or through a chosen fiscal cutoff. If beneficiaries have received the §16061.7 notice and have not waived accounting under the terms of the trust, the duty applies.

Q: What valuation date should the first accounting use?

A: The opening balance is valued at the settlor's date of death — the same date used for the IRC §1014 basis step-up on the settlor's assets. This establishes the trust's baseline for both tax basis and for all future accounting periods. Prior periods under the settlor-trustee are typically not accounted for the same way.

Q: What about the allocation between principal and income?

A: Every receipt and disbursement is allocated between principal and income under the California Uniform Principal and Income Act (Probate Code §16320 et seq.). Interest and dividends are typically income; sale proceeds and appreciation are typically principal; extraordinary distributions may require careful analysis. Getting this right on the first accounting matters because it drives every subsequent one.

Q: Do beneficiaries need to waive the accounting?

A: Some trusts include waiver provisions permitted by statute; some do not. Even where waiver is permitted, most attorneys advise the trustee to prepare a written first accounting anyway — the trustee's own protection. A signed waiver from each competent adult beneficiary is common practice.

Q: How does the first accounting interact with the trust's income tax return (Form 1041)?

A: The trust's fiduciary income tax return (Form 1041) reports taxable income, while the accounting reports fiduciary receipts and disbursements. The two overlap but are not the same document. We prepare both — coordinated so the numbers tie — for engagements that include tax preparation.

Q: How much does a first trust accounting cost?

A: Fixed-fee, quoted per engagement. A straightforward first accounting for a trust with 2-3 accounts starts around $3,500. Complex trusts — multiple properties, closely-held business interests, brokerage accounts, or beneficiary tension — scale from there. Written quote before work begins.

The first accounting sets the baseline. Get it right.

First trust accountings for California successor trustees under Probate Code §16063. Reconciled to statement-of-record. Written to defend. Fixed-fee quote in one call.