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Fiduciary Accounting Handbook 2018

The Fiduciary Accounting Handbook demystifies preparation of Probate Code accountings—assisting the work of professionals from probate judges to trust administration attorneys. With a fully revised chapter on court proceedings, the 2018 edition of the Handbook provides a step-by-step, schedule-by-schedule guide to preparing periodic accountings acceptable to the court and to affected parties.

“This must-have resource for any trust and estate practitioner or fiduciary is written in a practical and easy-to-understand style replete with 'how-to' illustrations and alerts.”
Keith Schiller, Esq., Schiller Law Group, Orinda

The Fiduciary Accounting Handbook demystifies preparation of Probate Code accountings—assisting the work of professionals from probate judges to trust administration attorneys. With a fully revised chapter on court proceedings, the 2018 edition of the Handbook provides a step-by-step, schedule-by-schedule guide to preparing periodic accountings acceptable to the court and to affected parties.

  • Two complete sample accountings, as well as separate sample schedules downloadable as Excel spreadsheets
  • Common mistakes found in fiduciary accountings
  • Practical explanation of when and how to make adjustments between income and principal
  • The rules scattered throughout the Probate Code organized into clear instructions to produce the accountings judges want to see
  • Separate chapters devoted to receipts, gains and losses, disbursements, and distributions
  • Recordkeeping checklist to ensure preparation of an acceptable accounting
  • Form engagement letter and helpful advice for working effectively with CPAs to produce an accurate accounting
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“This must-have resource for any trust and estate practitioner or fiduciary is written in a practical and easy-to-understand style replete with 'how-to' illustrations and alerts.”
Keith Schiller, Esq., Schiller Law Group, Orinda

The Fiduciary Accounting Handbook demystifies preparation of Probate Code accountings—assisting the work of professionals from probate judges to trust administration attorneys. With a fully revised chapter on court proceedings, the 2018 edition of the Handbook provides a step-by-step, schedule-by-schedule guide to preparing periodic accountings acceptable to the court and to affected parties.

  • Two complete sample accountings, as well as separate sample schedules downloadable as Excel spreadsheets
  • Common mistakes found in fiduciary accountings
  • Practical explanation of when and how to make adjustments between income and principal
  • The rules scattered throughout the Probate Code organized into clear instructions to produce the accountings judges want to see
  • Separate chapters devoted to receipts, gains and losses, disbursements, and distributions
  • Recordkeeping checklist to ensure preparation of an acceptable accounting
  • Form engagement letter and helpful advice for working effectively with CPAs to produce an accurate accounting

1

Introduction and Sample Accountings

  • I.  ORGANIZATION OF THIS BOOK  1.1
  • II.  EXAMPLES  1.2
    • A.  The April Cash Trust  1.3
      • 1.  The Settlor April Cash; Her Family and Her Assets  1.4
      • 2.  A Rare Negative Number: Account Beginning Date Bisects Settlement of Securities Purchase  1.5
      • 3.  Late Acquired Assets, Receipt From Fiduciary Accounting for Principal and Income  1.6
      • 4.  Another Rare Negative Number: Purchase of Bond With Accrued Interest  1.7
      • 5.  Dividend Reinvestment  1.8
      • 6.  Distributions in Breach of Trust  1.9
      • 7.  Miscellaneous and Routine Receipts and Disbursements  1.10
      • 8.  Sales and Exchanges: Gains, Losses, and Sales Without Gains or Losses  1.11
      • 9.  Trustee Fee, as a Liability  1.12
      • 10.  Sample Accounting of the April Cash Trust  1.13
        • a.  Summary of Account  1.14
        • b.  Assets on Hand—Beginning of Period  1.15
        • c.  Additions to Trust  1.16
        • d.  Receipts  1.17
        • e.  Gains on Sales  1.18
        • f.  Disbursements  1.19
        • g.  Losses on Sales  1.20
        • h.  Distributions  1.21
        • i.  Assets on Hand—End of Period  1.22
        • j.  Changes in Form of Assets  1.23
        • k.  Liabilities  1.24
    • B.  The Real Estate Trust  1.25
      • 1.  The Settlor David Jones; His Family and His Assets  1.26
      • 2.  Rents and Security Deposits  1.27
      • 3.  Receipt in Escrow  1.28
      • 4.  Gains and Losses on Sale  1.29
      • 5.  Funeral Expenses and Debts of a Decedent  1.30
      • 6.  Sale Without Gain or Loss: Sale for a Note  1.31
      • 7.  The Short Sale  1.32
      • 8.  Repairs and Capital Improvements  1.33
      • 9.  Mortgage Payments  1.34
      • 10.  Disbursements in Escrow  1.35
      • 11.  Cancellation of Indebtedness Income  1.36
      • 12.  Trustee’s “Loans” to Trust  1.37
      • 13.  Absconding Beneficiary and the Proposed Distribution  1.38
      • 14.  Sample Accounting of the David Jones Trust  1.39
        • a.  Summary of Account  1.40
        • b.  Assets on Hand—Beginning of Period  1.41
        • c.  Receipts  1.42
        • d.  Gains on Sales  1.43
        • e.  Disbursements  1.44
        • f.  Losses on Sales  1.45
        • g.  Distributions  1.46
        • h.  Assets on Hand—End of Period  1.47
        • i.  Changes in Form of Assets  1.48
        • j.  Liabilities  1.49
        • k.  Proposed Distributions  1.50

2

Types of Fiduciaries and the Various Duties to Account

  • I.  INTRODUCTION  2.1
  • II.  TYPES OF FIDUCIARIES, BRIEFLY
    • A.  Guardians  2.2
    • B.  Conservators  2.3
    • C.  Agents Under Powers of Attorney  2.4
    • D.  Personal Representatives
      • 1.  Nature of the Fiduciary Relationship  2.5
      • 2.  Types of Personal Representatives  2.6
    • E.  Trustees
      • 1.  Brief History  2.7
      • 2.  Modern Will-Substitute Trusts  2.8
  • III.  ACCOUNTS REQUIRED OF GUARDIANS AND CONSERVATORS
    • A.  Start Here: Inventory and Appraisal
      • 1.  Guardians and Conservators  2.9
      • 2.  Temporary Guardians and Temporary Conservators  2.10
    • B.  Periodic Accounting
      • 1.  First Account  2.11
      • 2.  Frequency of Accountings  2.12
      • 3.  Guardian or Conservator Dies or Absconds  2.13
      • 4.  Temporary Conservators and Guardians  2.14
    • C.  Final Account  2.15
    • D.  Standard or Simplified Accounting?  2.16
      • 1.  Judicial Council Account Forms  2.17
      • 2.  Standard Accounting
        • a.  When to Perform a Standard (Categorized) Accounting  2.18
        • b.  When to Use Judicial Council Forms  2.19
        • c.  Presenting Data on the Mandatory Judicial Council Form  2.20
      • 3.  Simplified Accounting  2.21
      • 4.  All Accountings, Whether Standard or Simplified  2.22
    • E.  Supporting Documents  2.23
    • F.  Penalties for Late Accounts  2.24
    • G.  The Guardian’s or Conservator’s Audience  2.25
    • H.  Waiver of Account  2.26
    • I.  Release of Guardian by Ward  2.27
    • J.  Petitioning for Approval of Accounting
      • 1.  Guardian’s Petition for Approval of Accounting  2.28
      • 2.  Conservator’s Petition for Approval of Accounting  2.29
  • IV.  ACCOUNTS REQUIRED OF PERSONAL REPRESENTATIVES
    • A.  Start Here: Inventory and Appraisal
      • 1.  Requirements for Filing an Inventory and Appraisal  2.30
      • 2.  When Administration Follows a Guardianship or Conservatorship  2.31
    • B.  Periodic Accounting
      • 1.  Generally, at End of Administration  2.32
      • 2.  Mid-Administration Accounting  2.33
    • C.  Terminated Personal Representative  2.34
    • D.  Deceased or Incapacitated Personal Representative  2.35
    • E.  The Absconding Personal Representative  2.36
    • F.  Documents That Support the Account  2.37
    • G.  Penalties for Failure to Account  2.38
    • H.  Waiver of Account  2.39
    • I.  “Report” Instead of Account  2.40
    • J.  Personal Representative’s Audience  2.41
    • K.  Petition to Approve Personal Representative’s Account  2.42
  • V.  ACCOUNTS REQUIRED OF TRUSTEES OF IRREVOCABLE TRUSTS
    • A.  Why Distinguish Between Irrevocable and Revocable Trusts?  2.43
    • B.  Duty to Account, Generally, to Report, and to Provide Information
      • 1.  Beneficiaries Defined  2.44
      • 2.  Duty to Account
        • a.  Duty Owed to Current Beneficiaries  2.45
        • b.  No Duty Owed to Remainder Beneficiaries  2.46
        • c.  Waivers
          • (1)  Waivers in the Trust Instrument  2.47
          • (2)  A Beneficiary’s Written Waiver  2.48
          • (3)  Waiver Does Not Trigger the Running of the Statute of Limitations  2.49
        • d.  Frequency  2.50
      • 3.  Duty to Report  2.51
      • 4.  Duty to Keep Beneficiaries Reasonably Informed  2.52
      • 5.  Trust Records and the Beneficiaries’ Right of Inspection
        • a.  Beneficiaries Have a Right to Inspect Trust Records  2.53
        • b.  Records the Trustee Should Keep  2.54
        • c.  The “Personal” Records of the Trustee Who Commingles  2.55
    • C.  Accounting as a Preliminary Step to the Performance of Other Duties  2.56
    • D.  Accounting Protects the Trustee
      • 1.  The 3-Year Statute of Limitations  2.57
      • 2.  The 180-Day Statute of Limitations  2.58
      • 3.  Petitions for Court Approval  2.59
      • 4.  Release of Liability for Disclosures Made in Accounting  2.60
        • a.  Beneficiary Must Have Capacity  2.61
        • b.  Full Disclosure  2.62
        • c.  Not Induced by Improper Conduct  2.63
        • d.  No Unfair Advantage  2.64
    • E.  Serving the Accounting  2.65
    • F.  Petitioning for Court Approval of Trustee’s Account  2.66
  • VI.  ACCOUNTS REQUIRED OF TRUSTEES OF REVOCABLE TRUSTS
    • A.  Duties Owed to Whom?  2.67
    • B.  When Person Holding the Power to Revoke Is Not Competent  2.68
    • C.  Distinguishing Persons to Whom Duties Are Owed From Persons With Standing  2.69
    • D.  Safe Practices  2.70
  • VII.  FORMAT OF TRUST ACCOUNTS
    • A.  Minimum Requirements  2.71
    • B.  Why Trustees Should Account as if Preparing for Court Review  2.72

3

Preparing the Accounting, Step by Step

  • I.  SIX PASSES  3.1
    • A.  First Pass: Gathering and Organizing the Working Papers  3.2
    • B.  Second Pass: Reconciling the Cash
      • 1.  Goals and Strategies  3.3
      • 2.  Setting Up the Spreadsheets  3.4
      • 3.  Checking Accounts  3.5
        • a.  The Description Columns  3.6
        • b.  The Receipts and Disbursements Columns  3.7
        • c.  Transfers Between Accounts  3.8
        • d.  Reconciliation  3.9
      • 4.  Investment Accounts  3.10
        • a.  Entering the Data  3.11
        • b.  Assets  3.12
        • c.  Dividend Reinvestments  3.13
        • d.  Reconciling the Cash  3.14
        • e.  Money Market Funds  3.15
        • f.  Investment Accounts With No Cash  3.16
      • 5.  Real Estate and Personal Property  3.17
      • 6.  Final Review  3.18
    • C.  Third Pass: Reconciling the Assets  3.19
      • 1.  Setting Up the Spreadsheet  3.20
      • 2.  Entering the Data  3.21
      • 3.  Reconciling the Assets  3.22
        • a.  The Steps  3.23
        • b.  Example: Purchases Only  3.24
        • c.  Example: When a Portion of the Asset Has Been Sold  3.25
        • d.  Example: When There Are Both Purchases and Sales of the Same Asset  3.26
        • e.  Example: Assets With No Activity  3.27
      • 4.  Final Review  3.28
      • 5.  When the Account Does Not Balance  3.29
    • D.  Fourth Pass: Reconciling the Whole Accounting  3.30
      • 1.  Setting Up the Spreadsheet  3.31
      • 2.  Entering the Data
        • a.  Cash Accounts  3.32
        • b.  Brokerage Cash Accounts  3.33
        • c.  Assets  3.34
        • d.  Special Assets  3.35
      • 3.  Checking the Spreadsheet  3.36
    • E.  Fifth Pass: Preparing the Schedules  3.37
      • 1.  Caption  3.38
      • 2.  Receipts Schedule  3.39
      • 3.  Additional Property Received During Period of Account Schedule  3.40
      • 4.  Disbursements Schedule  3.41
      • 5.  Distributions Schedule  3.42
      • 6.  Gains and Losses  3.43
      • 7.  Assets on Hand—End of Period  3.44
      • 8.  Changes in Form of Assets  3.45
      • 9.  Summary of Account  3.46
    • F.  Sixth Pass: Refining the Accounting  3.47
      • 1.  Missing Descriptions  3.48
      • 2.  Allocating Income and Principal  3.49
      • 3.  Missing Information  3.50
  • II.  EXHIBITS
    • A.  Form: Spreadsheet for a Checking Account  3.51
    • B.  Form: Spreadsheet for an Investment Account  3.52
    • C.  Form: Spreadsheet for Real Property  3.53
    • D.  Form: Spreadsheet for Personal Property  3.54
    • E.  Form: Third Pass Spreadsheet  3.55
    • F.  Form: Summary Reconciliation Spreadsheet  3.56
    • G.  Form: Summary of Account  3.57

4

Assets on Hand—Beginning of Period

  • I.  A MEASURE OF THE FIDUCIARY’S RESPONSIBILITY ON DAY ONE  4.1
    • A.  Preparing the Schedule Is a Three-Step Process  4.2
    • B.  The Schedule’s Appearance  4.3
    • C.  Minimum Requirements for Preparing the Schedule
      • 1.  Step One: Identify the Beginning Date
        • a.  When the Accounts of Guardians and Conservators Begin  4.4
        • b.  When the Accounts of Personal Representatives of Decedents’ Estates Begin  4.5
        • c.  When the Accounts of Trustees Begin
          • (1)  When an Income Interest Begins  4.6
          • (2)  When an Income Interest Ends  4.7
          • (3)  When the Trustee Starts After a Vacancy  4.8
      • 2.  Step Two: Identify All Property for Which the Fiduciary Is Accountable
        • a.  First Account: Property for Which Guardians, Conservators, and Personal Representatives Are Responsible  4.9
        • b.  First Account: Property for Which Trustees Are Responsible  4.10
        • c.  Second and Subsequent Accounts: Property for Which All Fiduciaries Are Responsible  4.11
      • 3.  Step Three: State the Carry Value of Each Item of Property
        • a.  Defining Carry Value  4.12
        • b.  Carry Value in First Accounts of Guardians, Conservators, and Personal Representatives  4.13
        • c.  Carry Value in Accounts of Trustees  4.14
    • D.  Differences Between First and Subsequent Accounts
      • 1.  The First Account  4.15
      • 2.  Assets on Hand at the Beginning of Subsequent Account Periods  4.16
    • E.  Best Practices  4.17
    • F.  Form: Principal and Income  4.18
    • G.  Insurance  4.19
    • H.  Income Receipts and Disbursements at the Beginning  4.20
    • I.  Income Received on Behalf of Terminated Mandatory Income Interest  4.21
    • J.  Common Mistakes
      • 1.  Using Negative Numbers  4.22
      • 2.  Failing to Inventory an Asset for Which the Fiduciary Is Responsible  4.23
      • 3.  Including Assets for Which the Fiduciary Has No Responsibility  4.24
      • 4.  Excluding Assets for Which the Fiduciary Is Responsible  4.25
      • 5.  Failing to Recognize That a Thing Is an Asset  4.26
      • 6.  Failing or Refusing to Recognize Responsibility  4.27
      • 7.  Failing to Recognize That Responsibility Begins Now  4.28
      • 8.  Confusing the Notion of “Wealth” With the Notion of “Responsibility”  4.29
      • 9.  Omitting Commingled Funds and Adjusting Carry Value to Make Account Balance  4.30
      • 10.  Confusing Net Value or Market Value With Carry Value  4.31
      • 11.  Treating Securities Accounts as a Single Property  4.32
  • II.  EXHIBITS
    • A.  Form: Using Negative Numbers  4.33
    • B.  Form: Failing to Recognize That a Thing Is an Asset  4.34

5

Additional Property Received During Period of Account

  • I.  DEFINING THE “ADDITIONAL PROPERTY RECEIVED DURING PERIOD OF ACCOUNT” SCHEDULE  5.1
    • A.  Defining Carry Value  5.2
    • B.  The Additional Property Schedule’s Appearance  5.3
  • II.  MINIMUM REQUIREMENTS FOR PREPARING THE SCHEDULE
    • A.  Preparing the Schedule for the Fiduciary’s First Account  5.4
    • B.  Preparing the Schedule for the Fiduciary’s Second and Subsequent Accounts  5.5
    • C.  Supplemental Inventory  5.6
  • III.  PRINCIPAL AND INCOME: RECEIPTS FROM DECEDENT’S ESTATE AND OTHER TRUSTS  5.7
  • IV.  FORM: ADDITIONS TO TRUST SCHEDULE  5.8

6

Receipts

  • I.  ACCOUNTING FOR RECEIPTS  6.1
  • II.  THE RECEIPTS SCHEDULE’S APPEARANCE  6.2
  • III.  PREPARING THE SCHEDULE, AT A MINIMUM  6.3
    • A.  Categorize  6.4
    • B.  Receipts in Escrow  6.5
    • C.  Disclose Mistakes  6.6
    • D.  Borrowed Funds  6.7
  • IV.  RECEIPTS OF PRINCIPAL AND INCOME
    • A.  Income Is a Defined Term  6.8
    • B.  Receipts From Entities Are Generally Income  6.9
    • C.  Receipts From Entities: Allocation to Principal  6.10
    • D.  Receipts From Entities: Mutual Funds  6.11
    • E.  Receipts From a Decedent’s Estate and Other Trusts; Trust-Owned Businesses Accounting Separately; Derivatives, Options, and Asset-Backed Securities  6.12
      • 1.  Receipts From a Decedent’s Estate and Other Trusts  6.13
      • 2.  Receipts From Trust-Owned Businesses for Which Trustee Accounts Separately  6.14
      • 3.  Receipts From Derivatives, Options, and Asset-Backed Securities  6.15
    • F.  Receipts Normally Allocated 100 Percent to Principal  6.16
    • G.  Receipts From Rental Properties  6.17
    • H.  Bank Account Interest Owed to Trustee  6.18
    • I.  Interest on Bonds Owed to Trustee  6.19
    • J.  Special Rules for Assets Listed in Prob C §16357(c)  6.20
    • K.  Insurance Against Loss of Occupancy, Income, or Profits; Property Insurance; Life Insurance
      • 1.  Allocation of Insurance Proceeds Between Income and Principal  6.21
      • 2.  Which Schedule?  6.22
        • a.  Accounting for Property Insurance Proceeds  6.23
        • b.  Accounting for Title Insurance Proceeds  6.24
        • c.  Accounting for Life Insurance Proceeds  6.25
      • 3.  Dividends  6.26
    • L.  Insubstantial Receipts  6.27
    • M.  Deferred Compensation, Qualified and Non-Qualified Plans, IRAs, Annuities  6.28
      • 1.  Trusts Not Described in IRC §2056(b)(5) or §2056(b)(7)  6.29
      • 2.  Trusts Described in IRC §2056(b)(5) or §2056(b)(7)  6.30
        • a.  If Payor Provides Documentation  6.31
        • b.  If Separate Fund Payor Provides No Documentation  6.32
    • N.  Liquidating Assets: Leasehold Interests, Patents, Copyrights, Royalty Rights, Notes With No Stated Interest  6.33
    • O.  Mineral, Water, and Natural Resources  6.34
      • 1.  Receipts Allocated 100 Percent to Income  6.35
      • 2.  Production Payments Under an Agreement That Provides for Interest or Its Equivalent  6.36
      • 3.  Other Receipts; the 90:10 Rule  6.37
      • 4.  Trust-Owned Interests Acquired On or Before January 1, 2000  6.38
    • P.  Timber and Related Products  6.39
      • 1.  Timberland Acquired After January 1, 2000  6.40
      • 2.  Timberland Acquired On or Before January 1, 2000  6.41
    • Q.  Derivatives and Options  6.42
    • R.  Collateral-Backed Securities  6.43
    • S.  Dividend Reinvestment Programs  6.44
    • T.  Specifically Gifted Property  6.45
  • V.  COMMON MISTAKES
    • A.  Late-Received Assets Are Not Receipts  6.46
    • B.  In General, Sales Proceeds Are Not Receipts  6.47
    • C.  Receipts Collected During a Sale Are Not Gross Sales Proceeds  6.48
    • D.  Omitting From Assets on Hand the Source of a Receipt  6.49
    • E.  Failing to Account for Receipts From Commingled Assets  6.50
    • F.  Form 1099 Phantom Income Is Not a Receipt  6.51
    • G.  Transfers Between Accounts Are Not Receipts  6.52
  • VI.  EXHIBITS
    • A.  Form: Receipts Schedule  6.53
    • B.  Form: Receipts From Entities  6.54
    • C.  Form: Dividends and Capital Gains  6.55
    • D.  Form: Receipts From Rental Properties  6.56
    • E.  Form: Bank Account Interest  6.57
    • F.  Form: Interest on Bonds Owed to Trustee  6.58
    • G.  Form: Assets Listed in Prob C §16357(c)  6.59
    • H.  Form: Dividend Reinvestment Programs  6.60

7

Gains and Losses

  • I.  IN GENERAL
    • A.  Distinguishing Gains From Losses  7.1
    • B.  Separate Schedules Are Required  7.2
    • C.  Appearance of the Schedules
      • 1.  Gains  7.3
      • 2.  Losses  7.4
  • II.  PREPARING THE SCHEDULES, AT A MINIMUM
    • A.  Gains on Sales or Other Dispositions  7.5
    • B.  Losses on Sales or Other Dispositions  7.6
  • III.  BEST PRACTICES  7.7
  • IV.  PRINCIPAL AND INCOME
    • A.  In General  7.8
    • B.  Mineral and Water Interests, Other Natural Resources, Timber  7.9
    • C.  Sale, Redemption, or Other Disposition of Obligation to Pay Money  7.10
      • 1.  Obligations That Mature More Than 1 Year After Acquisition  7.11
      • 2.  Obligations That Mature in Less Than 1 Year  7.12
    • D.  Options  7.13
    • E.  Asset-Backed Securities  7.14
    • F.  Insurance Proceeds  7.15
    • G.  Marital Deduction Trusts  7.16
  • V.  COMMON MISTAKES
    • A.  It Is a Mistake to Calculate Gain Using Net Sales Price  7.17
    • B.  It Is a Mistake to Calculate Loss Using Net Sales Price  7.18
  • VI.  EXHIBITS
    • A.  Form: Gains on Sales or Other Dispositions  7.19
    • B.  Form: Insurance Proceeds  7.20
    • C.  Form: Sales in Which Expenses Were Paid in the Course of the Sale  7.21

8

Disbursements

  • I.  WHAT A DISBURSEMENTS SCHEDULE MUST INCLUDE  8.1
    • A.  Disbursements: Payments to Third Parties  8.2
    • B.  The Disbursements Schedule’s Appearance
      • 1.  Requirements for Different Types of Fiduciaries  8.3
      • 2.  Sample Complete Disbursements Schedules
        • a.  Form: Disbursements From the Cash Trust  8.4
        • b.  Form: Disbursements From the Real Estate Trust  8.5
  • II.  PREPARING THE SCHEDULE, AT A MINIMUM  8.6
  • III.  BEST PRACTICES
    • A.  Disclose, Explain, and Atone for Mistakes  8.7
    • B.  List Categorically, Then Chronologically  8.8
    • C.  Each Real Property and Business Is Its Own Category  8.9
    • D.  Amounts Disbursed in Escrow  8.10
    • E.  Use Subtotals  8.11
  • IV.  DISBURSEMENTS OF PRINCIPAL AND INCOME
    • A.  Debts of a Decedent, Expenses of Final Illness, and Expenses of Prior Administrations  8.12
      • 1.  Payments From Principal  8.13
      • 2.  Discretion to Pay From Either Income or Principal  8.14
      • 3.  Paid Equally From Income and Principal  8.15
    • B.  Disbursements During Administration  8.16
      • 1.  Expenses Paid Half From Income, Half From Principal  8.17
      • 2.  Expenses Paid 100 Percent From Principal  8.18
      • 3.  Expenses Paid 100 Percent From Income  8.19
    • C.  Payment of Taxes
      • 1.  Gift, Estate, Inheritance, and Other Similar Taxes  8.20
      • 2.  Property Taxes  8.21
      • 3.  Income and Capital Gains Tax  8.22
    • D.  Expenses of Administering Real Property  8.23
    • E.  Loan Payments, Payments on Trust Debts  8.24
    • F.  Specifically Gifted Property  8.25
  • V.  COMMON MISTAKES
    • A.  Payments From Sources Other Than the Res  8.26
    • B.  Asset Purchases Are Not Disbursements  8.27
    • C.  Transfers Are Not Disbursements  8.28
  • VI.  EXHIBITS
    • A.  Form: Receipts Related to Real Property  8.29
    • B.  Form: Amounts Disbursed in Escrow  8.30
    • C.  Form: Debts Associated With a Decedent’s Death Paid From Principal  8.31
    • D.  Form: Expenses Associated With Real Property  8.32
    • E.  Form: Loan Payments, Payments on Trust Debts  8.33

9

Distributions

  • I.  WHEN DISTRIBUTIONS CAN BE MADE  9.1
    • A.  Distributions Versus Disbursements  9.2
    • B.  The Appearance of the Distributions Schedule  9.3
  • II.  PREPARING THE SCHEDULE, AT A MINIMUM
    • A.  Account for Distributions Using Carry Value  9.4
      • 1.  Example 1: Distribution of Depreciated Asset  9.5
      • 2.  Example 2: Distribution of Appreciated Asset  9.6
    • B.  The Appearance of the Schedule: Favored Gifts First  9.7
  • III.  ABATEMENT; PRORATION OF TAXES; SATISFACTION OF OMITTED SPOUSE, REGISTERED DOMESTIC PARTNER, OR CHILD  9.8
    • A.  Abatement: Which Gifts Shrink to Pay Debts and Expenses?  9.9
      • 1.  Specific Gifts  9.10
      • 2.  General Gifts  9.11
      • 3.  Demonstrative Gifts  9.12
      • 4.  General Pecuniary Gifts  9.13
      • 5.  Annuity  9.14
      • 6.  Residuary Gifts and Property Not Distributed by the Instrument  9.15
      • 7.  Categorization of People  9.16
      • 8.  Rules of Abatement  9.17
        • a.  Property Not Disposed of by the Instrument  9.18
        • b.  Remaining Gifts  9.19
      • 9.  Gift Exonerated From Mortgage, Deed of Trust, or Other Lien  9.20
      • 10.  Abatement in Action  9.21
    • B.  Proration of Taxes  9.22
    • C.  Transfers to Omitted Spouse, Registered Domestic Partner, or Child
      • 1.  Omitted Spouse or Registered Domestic Partner  9.23
      • 2.  Omitted Child  9.24
      • 3.  Manner of Satisfying Share of Omitted Spouse, Registered Domestic Partner, or Child  9.25
  • IV.  PRINCIPAL AND INCOME
    • A.  In General  9.26
    • B.  Allocation of Income After the Decedent’s Death or After an Income Interest in a Trust Ends
      • 1.  Specific Gifts
        • a.  Expenses and Receipts Attributable to Specific Gifts  9.27
          • (1)  Receipts and Disbursements, at the Beginning  9.28
          • (2)  Receipts and Disbursements, During the Administration  9.29
          • (3)  Receipts and Disbursements, at the End  9.30
        • b.  Debts and General Expenses of Administration  9.31
      • 2.  General Pecuniary Gifts, Annuities, and Gifts of Maintenance  9.32
      • 3.  Net Income Distributable to Residuary Beneficiaries  9.33
  • V.  TAX ATTRIBUTES OF DISTRIBUTIONS  9.34
  • VI.  AVOIDING COMMON MISTAKES
    • A.  Do Not Report Distributions Using Market Value  9.35
    • B.  Give Interest Where Due  9.36
  • VII.  ABATEMENT EXAMPLES AND SELF-TESTS
    • A.  Abatement: Example 1 and Self-Test  9.37
    • B.  Abatement: Example 2 and Self-Test  9.38
    • C.  Abatement: Example 3 and Self-Test  9.39
    • D.  Abatement: Example 4 and Self-Test  9.40
    • E.  Abatement: Example 5 and Self-Test  9.41
    • F.  Abatement: Example 6 and Self-Test  9.42
  • VIII.  EXHIBITS
    • A.  Form: Expenses and Receipts Applicable to a Specific Gift  9.43
    • B.  Form: Accounting for the Accrual of Interest on a General Pecuniary Gift  9.44

10

Assets on Hand—End of Period

  • I.  SUMMARY OF THE ASSETS ON HAND—END OF PERIOD SCHEDULE  10.1
  • II.  PREPARING THE SCHEDULE, AT A MINIMUM
    • A.  Ending Date
      • 1.  Guardians and Conservators  10.2
      • 2.  Personal Representatives  10.3
      • 3.  Trustees  10.4
    • B.  Assets on Hand  10.5
  • III.  BEST PRACTICES
    • A.  Check Beginning Schedules  10.6
    • B.  Personal Representatives: Check Inventories and Appraisals  10.7
  • IV.  PRINCIPAL AND INCOME  10.8
  • V.  COMMON MISTAKES
    • A.  Assets Not Inventoried  10.9
    • B.  Substituting Market Value for Carry Value  10.10
  • VI.  EXHIBITS
    • A.  Form: Sample Assets on Hand—End of Period Schedule (Cash, Real Estate, and Receivables)  10.11
    • B.  Form: Sample Assets on Hand—End of Period Schedule (Cash, Equities, Corporate Bonds, Mutual Funds, a Limited Partnership, and Personal Property)  10.12

11

Auxiliary Schedules

  • I.  IN GENERAL  11.1
  • II.  THE AUXILIARY SCHEDULES, BRIEFLY
    • A.  Schedule of Estimated Market Value  11.2
    • B.  Purchases, Sales, or Other Changes in Form  11.3
    • C.  Allocation of Receipts and Disbursements Between Principal and Income  11.4
    • D.  Proposed Distributions  11.5
      • 1.  Distribution to Income Beneficiary  11.6
      • 2.  Specifically Devised Property  11.7
      • 3.  Interest on Bequests, Gifts of Annuities, and Gifts for Maintenance  11.8
    • E.  Schedule of Liabilities  11.9
    • F.  Guardians and Conservators  11.10
  • III.  CHANGES IN FORM OF ASSETS  11.11
    • A.  Disbursements and Exchanges  11.12
    • B.  Sale Price Equal to Asset’s Carry Value  11.13
    • C.  Payments of Principal From a Debtor Obligated to the Trust  11.14
    • D.  Transactions That Affect an Asset’s Carry Value  11.15
    • E.  Loans  11.15A
    • F.  Transfers Between Accounts  11.16
  • IV.  EXHIBITS
    • A.  Form: Spreadsheet Illustrating Sale Price Equal to Asset’s Carry Value  11.17
    • B.  Form: Spreadsheet Showing Payments of Principal From a Debtor to the Trust  11.18
    • C.  Spreadsheets Showing Transactions Affecting an Asset’s Carry Value
      • 1.  Form: Purchase of Bond and Reinvestment of Dividends  11.19
      • 2.  Form: Disbursement of Funds to Improve Real Property  11.20
    • D.  Spreadsheets Showing Liabilities
      • 1.  Form: Spreadsheet Accounting for Tenant Security Deposit  11.21
      • 2.  Form: Spreadsheet Showing Increase in Liabilities  11.22

12

Summary of Account, Reconciliation

  • I.  SUMMARY OF ACCOUNT  12.1
  • II.  APPEARANCE OF THE SUMMARY OF ACCOUNT
    • A.  Statutory Form and Requirements for Summary of Account  12.2
    • B.  Improved Summary of Account  12.3
  • III.  BEST PRACTICES
    • A.  Use the “Equals” Function  12.4
    • B.  Charges Equal Credits, From Time to Time  12.5
    • C.  What to Do When Account Will Not Balance  12.6
  • IV.  AVOIDING COMMON MISTAKES  12.7

13

Adjustments Between Principal and Income

  • I.  THE FOUR COMPONENTS OF CALIFORNIA’S UNIFORM PRINCIPAL AND INCOME ACT  13.1
  • II.  ACCOUNTING SEPARATELY FOR A TRUST-OWNED BUSINESS  13.2
    • A.  Activities for Which Trustees May Account Separately  13.3
    • B.  Guidelines for Accounting Separately for an Activity  13.4
  • III.  ADJUSTMENTS BETWEEN PRINCIPAL AND INCOME, GENERALLY  13.5
    • A.  Threshold Criteria  13.6
    • B.  When Prohibited  13.7
    • C.  Factors for Trustee to Consider  13.8
    • D.  Notice of Proposed Action  13.9
  • IV.  INCREASING INCOME IN ORDER TO OBTAIN MARITAL DEDUCTION  13.10
    • A.  When Income Beneficiary May Compel Trustee to Make Trust Property Productive  13.11
    • B.  How Trustee May Respond to a Demand to Make Trust Property Productive  13.12
  • V.  DEPRECIATION RESERVE  13.13
    • A.  When to Create a Depreciation Reserve  13.14
    • B.  How to Create a Depreciation Reserve  13.15
    • C.  Cash in Depreciation Reserve Cannot Be Recharacterized  13.16
  • VI.  TRANSFERS FROM INCOME TO PRINCIPAL IN ANTICIPATION OF PRINCIPAL DISBURSEMENT  13.17
  • VII.  ADJUSTMENTS TO OFFSET SHIFTING ECONOMIC INTERESTS OR TAX BENEFITS
    • A.  Mandatory Allocation of Prob C §16374  13.18
    • B.  Discretionary Adjustment of Prob C §16375(a)  13.19
    • C.  Mandatory Adjustment of Prob C §16375(b)  13.20

14

Court Proceedings

  • I.  INTRODUCTION: GENERAL CONCEPTS  14.1
  • II.  GUARDIANSHIPS, CONSERVATORSHIPS, AND DECEDENTS’ ESTATES
    • A.  Jurisdiction and Venue  14.2
    • B.  Objections to Appraisals  14.3
    • C.  Interim Accountings in Guardianships and Conservatorships  14.4
    • D.  Interim Accountings in Decedents’ Estates  14.5
    • E.  Compelling Production of Late Accountings
      • 1.  Court’s Obligations in Guardianships and Conservatorships  14.6
      • 2.  Ward’s Power to Settle Guardian’s Account and Release Guardian  14.7
      • 3.  What “Late” Means in Decedents’ Estates  14.8
      • 4.  Court’s Obligations in Decedents’ Estates  14.9
    • F.  Waivers of Account
      • 1.  Guardianships and Conservatorships  14.10
      • 2.  Decedents’ Estates  14.11
    • G.  Petition to Approve Accounts
      • 1.  Uncontested Petition  14.12
      • 2.  Contested Petition  14.13
  • III.  TRUSTS
    • A.  Jurisdiction and Venue  14.14
    • B.  Court Trial  14.15
    • C.  Petitions to Compel Performance of Trustee’s Duties  14.16
    • D.  Standing
      • 1.  Irrevocable Trusts  14.17
      • 2.  Revocable Trusts: No Allegation of Incompetence  14.18
      • 3.  Revocable Trust: Person Holding Power to Revoke Is Allegedly Incompetent  14.19
      • 4.  Once-Revocable Trust: Power-Holder Deceased  14.20
    • E.  Recommended Procedure: Living Power-Holder Alleged to Be Incompetent
      • 1.  Presumption of Capacity  14.21
      • 2.  Conservatorship Rebuts Presumption of Capacity  14.22
      • 3.  Uncontested Verified Petition Alleges Incapacity  14.23
      • 4.  Procedure if Allegation of Incapacity Is Contested  14.24
    • F.  Incapacitated Settlor: To Whom Does Trustee Owe Duties?  14.25
    • G.  Orders the Court May Make Without Hesitation  14.26
      • 1.  Trustee Must Provide Terms of Trust  14.27
      • 2.  Trustee Must Report Information Relevant to Beneficiary's Interest  14.28
      • 3.  Trustee Must Allow Reasonable Inspections  14.29
      • 4.  Trustee Must Account  14.30
    • H.  Court Need Not Order Trustee to Seek Approval of Account  14.31
    • I.  Dismissing Trustee’s Petition to Approve Account  14.32
    • J.  Prob C §16460 Bars Claim Disclosed in Accounting  14.33
    • K.  CCP §343 Bars Late Demand for Accounting  14.34
  • IV.  HEARING OBJECTIONS TO ACCOUNTINGS
    • A.  Standing
      • 1.  Standing in Guardianships and Conservatorships  14.35
      • 2.  Standing in Decedents’ Estates  14.36
    • B.  Standing in Trusts  14.37
      • 1.  Hearing the Objections to an Accounting  14.38
    • C.  No “One Final Judgment” Rule  14.39
    • D.  Fee Shifting
      • 1.  Penalties for Unreasonable Objections Made in Bad Faith  14.40
      • 2.  Penalties for Unreasonable Defenses Made in Bad Faith  14.41
      • 3.  What Constitutes an Action Taken Without Reasonable Cause and in Bad Faith?  14.42
  • V.  UNDERUTILIZED JUDICIAL TOOLS
    • A.  Guardianships, Conservatorships, and Decedents’ Estates  14.43
      • 1.  Examination Concerning Assets of Estate  14.44
      • 2.  Accountings by Third Parties  14.45
      • 3.  Supporting Documents to Limit Issues to Be Tried   14.46
      • 4.  Right of Inspection to Limit Discovery Disputes  14.47
    • B.  Judicial References  14.48
      • 1.  Voluntary Reference Under CCP §638  14.49
      • 2.  Involuntary Reference Under CCP §639  14.50
      • 3.  Challenges to Referee’s Decision  14.51
      • 4.  Referee’s Fees  14.52
    • C.  Approved Accountings Are Res Judicata   14.53

15

Project Management; Useful Miscellanea; a Word to and About CPAs

  • I.  INTRODUCTION  15.1
  • II.  THE ENGAGEMENT LETTER  15.2
    • A.  Define the Scope of the Engagement  15.3
    • B.  Avoid Hyperbole  15.4
    • C.  Specify Responsibility for Appraising Assets  15.5
    • D.  Define Fiduciary’s Responsibility  15.6
    • E.  Be Realistic About Deadlines  15.7
    • F.  Ask for a Broad Array of Documents  15.8
    • G.  Fee Structure
      • 1.  Hourly Billing  15.9
      • 2.  Flat-Fee Billing  15.10
    • H.  Deposit for Future Services  15.11
    • I.  Record Retention Policy  15.12
    • J.  Termination Clause  15.13
    • K.  Wait!  15.14
  • III.  TIPS FOR THE ACCOUNTANT
    • A.  Help Fiduciary Manage Documents  15.15
    • B.  Security Measures  15.16
    • C.  Powers of Attorney  15.17
    • D.  Software  15.18
  • IV.  FOR ATTORNEYS: USING FIDUCIARY ACCOUNTINGS AS A CLIENT MANAGEMENT TOOL
    • A.  Start Early  15.19
    • B.  Schedule Face-to-Face Meetings  15.20
  • V.  FOR CERTIFIED PUBLIC ACCOUNTANTS AND THOSE WHO ENGAGE THEM
    • A.  A Word to Attorneys, Lay People, and the Court
      • 1.  The “No Assurance” Problem  15.21
      • 2.  The CPA’s Relationship to the Client and the Public  15.22
      • 3.  Level of Service  15.23
      • 4.  The Report Generally  15.24
      • 5.  The Old Litigation Exception  15.25
      • 6.  After December 15, 2015; Reports, Statements, and Disclaimers  15.26
      • 7.  Explaining “No Assurance”  15.26A
    • B.  The CPA Engaged to Prepare a Fiduciary Accounting
      • 1.  Whether a Fiduciary Accounting Is a Financial Statement  15.26B
      • 2.  The Engagement to Prepare a Fiduciary Accounting  15.26C
  • VI.  FORM: SAMPLE ENGAGEMENT LETTER  15.27
  • VII.  LIST OF DOCUMENTS NEEDED TO PREPARE FIDUCIARY ACCOUNTING  15.28
  • VIII.  CHART: ALLOCATION OF RECEIPTS AND DISBURSEMENTS UNDER CALIFORNIA UNIFORM PRINCIPAL AND INCOME ACT  15.29

FIDUCIARY ACCOUNTING HANDBOOK

(1st Edition)

April 2018

TABLE OF CONTENTS

 

File Name

Book Section

Title

CH01

Chapter 1

Introduction and Sample Accountings

01-014

§1.14

Summary of Account (April Cash Trust)

 

§1.15

Assets on Hand—Beginning of Period

 

§1.16

Additions to Trust

 

§1.17

Receipts

 

§1.18

Gains on Sales

 

§1.19

Disbursements

 

§1.20

Losses on Sales

 

§1.21

Distributions

 

§1.22

Assets on Hand—End of Period

 

§1.23

Changes in Form of Assets

 

§1.24

Liabilities

01-040

§1.40

Summary of Account (David Jones Trust)

 

§1.41

Assets on Hand—Beginning of Period

 

§1.42

Receipts

 

§1.43

Gains on Sales

 

§1.44

Disbursements

 

§1.45

Losses on Sales

 

§1.46

Distributions

 

§1.47

Assets on Hand—End of Period

 

§1.48

Changes in Form of Assets

 

§1.49

Liabilities

 

§1.50

Proposed Distributions

CH03

Chapter 3

Preparing the Accounting, Step by Step

03-004a

§3.4

Setting Up the Spreadsheet (Bank Account)

 

 

Setting Up the Spreadsheet (Investment Account)

 

 

Setting Up the Spreadsheet (Real & Personal Property)

 

§3.20

Setting Up the Spreadsheet

 

§3.24

Purchases Only

 

§3.25

Portion of Asset Has Been Sold

 

§3.26

Purchases and Sales of Same Asset

 

 

Purchases and Sales of Same Asset

 

§3.51

Spreadsheet for a Checking Account

 

§3.52

Spreadsheet for an Investment Account

 

§3.53

Spreadsheet for Real Property

 

§3.54

Spreadsheet for Personal Property

 

§3.55

Third Pass Spreadsheet

 

§3.56

Summary Reconciliation Spreadsheet

 

§3.57

Summary of Account

03-030

§3.30

Reconciling the Whole Accounting

03-031

§3.31

Setting Up the Spreadsheet (Summary Reconciliation)

03-038

§3.38

Caption

03-039

§3.39

Receipts Schedule

03-040

§3.40

Additional Property Received During Period of Account Schedule

03-041

§3.41

Disbursements Schedule

03-042

§3.42

Distributions Schedule

03-043

§3.43

Gains and Losses

03-044

§3.44

Assets on Hand—End of Period

03-045

§3.45

Changes in Form of Assets

CH04

Chapter 4

Assets on HandBeginning of Period

04-018

§4.18

Principal and Income

 

§4.33

Using Negative Numbers

 

§4.34

Failing to Recognize a Thing Is an Asset

CH05

Chapter 5

Additional Property Received During Period of Account

05-008

§5.8

Additions to Trust Schedule

CH06

Chapter 6

Receipts

06-053

§6.53

Receipts Schedule

 

§6.54

Receipts from Entities

 

§6.55

Dividends and Capital Gains

 

§6.56

Receipts from Rental Properties

 

§6.57

Bank Account Interest

 

§6.58

Interest on Bonds Owed to Trustee

 

§6.59

Assets Listed in Prob C §16357(c)

 

§6.60

Dividend Reinvestment Programs

CH07

Chapter 7

Gains and Losses

07-019

§7.19

Gains on Sales or Other Dispositions

 

§7.20

Insurance Proceeds

 

§7.21

Sales in Which Expenses Were Paid in the Course of the Sale

CH08

Chapter 8

Disbursements

08-004

§8.4

Sample Complete Disbursements Schedule: Cash Trust

08-005

§8.5

Sample Complete Disbursements Schedule: Real Estate Trust

 

§8.29

Receipts Related to Real Property

 

§8.30

Amounts Disbursed in Escrow

 

§8.31

Debts Associated with a Decedent’s Death Paid from Principal

 

§8.32

Expenses Associated with Real Property

 

§8.33

Loan Payments, Payments on Trust Debts

CH09

Chapter 9

Distributions

09-003a

§9.3

Sample Distribution Schedule: Cash and Securities

 

 

Sample Distribution Schedule: Speed Boat

 

§9.43

Expenses and Receipts Applicable to a Specific Gift

 

§9.44

Accounting for the Accrual of Interest on a General Pecuniary Gift

CH10

Chapter 10

Assets on HandEnd of Period

10-011

§10.11

Sample Assets on Hand—End of Period Schedule (Cash, Real Estate, and Receivables)

10-012

§10.12

Sample Assets on Hand—End of Period Schedule (Cash, Equities, Corporate Bonds, Mutual Funds, a Limited Partnership, and Personal Property)

CH11

Chapter 11

Auxiliary Schedules

11-017

§11.17

Spreadsheet Illustrating Sale Price Equal to Asset’s Carry Value

 

§11.18

Spreadsheet Showing Payments of Principal from a Debtor to the Trust

 

§11.19

Purchase of Bond and Reinvestment of Dividents

 

§11.20

Disbursement of Funds to Improve Real Property

 

§11.21

Spreadsheet Accounting for Tenant Security Deposit

 

§11.22

Spreadsheet Showing Increase in Liabilities

CH12

Chapter 12

Summary of Account, Reconciliation

12-002

§12.2

Statutory Form and Requirements for Summary of Account

12-003

§12.3

Improved Summary of Account

CH15

Chapter 15

Project Management; Useful Miscellanea; a Word to and About CPAs

15-015

§15.15

Help Fiduciary Manage Documents

15-027

§15.27

Form: Sample Engagement Letter

         

 

Selected Developments

April 2018 Update

This book’s goals, to demystify Probate Code accountings and describe a set of best practices for their preparation, are straightforward. The path to achieving those goals is likewise straightforward but time intensive. Through continual review of the relevant literature, case law, and legislation, and annual updates based on that review, the Fiduciary Accounting Handbook will remain useful for fiduciaries, their accountants, and their attorneys who endeavor to tell an accurate and complete story through their accountings. Below, several updates in the 2018 edition have been highlighted.

Assembly Bill 307 (Stats 2017, ch 577), effective January 1, 2018, revises Prob C §16350, regarding how income and principal are allocated when received from an entity. Before January 1, 2018, a trustee allocated money received from an entity to income unless the money qualified for a statutory exception. If an exception applied, the trustee allocated the money to principal. The statutory exceptions include the following:

  • Property other than money (Prob C §16350(c)(1));

  • Money received in one distribution or a series of related distributions in exchange for a part or all of a trust’s interest in the entity (Prob C §16350(c)(2));

  • Money received in a distribution if and to the extent that the fiduciary determines that the distribution is a return of capital (however, the fiduciary may allocate to income the amount, if any, the fiduciary determines is not a return of capital and allocate the balance to principal (Prob C §16350(f))) (Prob C §16350(c)(3)); and

  • Money received from an entity that is a regulated investment company or a real estate investment trust, if the money distributed is a capital gain dividend for federal income tax purposes (Prob C §16350(c)(4)).

Revised Prob C §16350 eliminates the bright-line test for determining whether money received from an entity should be allocated to income or principal. If money falls within a statutory exception, it should be allocated to principal, but the trustee has some flexibility in making the determination about whether an exception applies. The bill also allows the trustee to rely on information related to the source of the money provided to the trustee by the entity. See §§6.9–11, 6.44, 15.29.

Chapter 14, on court proceedings, has been completely rewritten and reorganized. The chapter reviews court proceedings for guardianships, conservatorships, and probate and trust matters. Extra attention is given to trust matters because those are usually the ones involving enough money to bring the parties to court. Further, who has standing to challenge a trustee’s actions is not always clear, and this chapter recommends a procedure to determine the settlor’s capacity. The chapter concludes by calling attention to certain judicial tools—for example, third party accountings and references under CCP §§368 and 369—that are underutilized.

About the Authors

MARGARET M. HAND (Chapters 1, 2, 4–13, and 15) is a partner with the firm Hartog, Baer & Hand in Orinda, California, and has been serving trust and probate clients in the Bay Area since 1993. Ms. Hand is a certified specialist in estate planning, trust, and probate law, and is a fellow of the American College of Trust and Estate Counsel (ACTEC). She specializes in probate and trust administration, as well as conservatorships and guardianships. In addition, she teaches fiduciary accounting for the CalCPA Education Foundation. Ms. Hand received her undergraduate degree from the University of California, San Diego, and her J.D. from the University of California, Berkeley, School of Law.

HEATHER HAMILTON (Chapter 3, “Preparing the Accounting, Step by Step”) is a principal of Fiduciary Accounting Services, LLC in Moraga. Prior to co-founding the firm in 2007, she had a 15-year career in banking, primarily serving privately held and family-owned businesses and technology companies. She is a graduate of the California State University at Chico, with a degree in Finance. She is a member of the Diablo Valley Estate Planning Council, and has served on the board of the Junior League of Oakland-East Bay, the Cancer Support Community, and the Contra Costa Ballet Foundation. She specializes in preparing accountings for trusts, estates, and conservatorships, and is widely regarded as one of the Bay Area’s most knowledgeable and skillful practitioners of this type of accounting.

DON EDWARD GREEN (Chapter 14, “Conflicts and Litigation”) received his B.A. in 1973 from California State University, Long Beach, and his J.D. in 1976 and LL.M. (Taxation) in 1983 from McGeorge Law School. He retired in 2010, having served as the Probate Commissioner, Contra Costa Superior Court, and formerly having served as probate staff attorney, Sacramento Superior Courts, from 1989 to 1998. Before working for the court, Mr. Green practiced law as a certified specialist in estate planning, trust, and probate law (suspended while serving as a judicial officer). He is a former chair of the California State Bar Trusts and Estates Section, served as an Executive Committee member for 10 years, and served as Judicial Liaison to that section. He also served as a member of the Judicial Council of California Probate and Mental Health Advisory Committee. Mr. Green is a frequent lecturer and speaker for CEB, PLI, CJER, sections of the State Bar of California, county bar associations, and various community groups and charities. He was named Pro Bono Judge of the Year 2003 by the Contra Costa County Bar Association.

About the 2018 Update Author

MARGARET M. HAND, author of chapters 1, 2, 4–13, and 15 in the first edition of this book, is the author of the 2018 update, including a rewritten chapter 14. She is a principal with the firm Hartog, Baer & Hand in Orinda, California, and has been serving trust and probate clients in the Bay Area since 1993. Ms. Hand is a certified specialist in estate planning, trust, and probate law, and is a fellow of the American College of Trust and Estate Counsel (ACTEC). She specializes in probate and trust administration, as well as conservatorships and guardianships. In addition, she teaches fiduciary accounting for the CalCPA Education Foundation. Ms. Hand received her undergraduate degree from the University of California, San Diego, and her J.D. from the University of California, Berkeley, School of Law.

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