Can I Waive My Right to an Accounting

I recently spoke with Emily, a client who discovered her brother, the trustee of her mother’s trust, hadn’t provided a single accounting in over two years. She assumed she could simply demand one and, if he refused, go to court. What she didn’t realize is that, in California, beneficiaries can waive their right to receive an accounting—but doing so is fraught with peril. The potential cost to Emily if she accepted his explanations without verifying them? Easily six figures, possibly more, due to undetected mismanagement and self-dealing.

As an estate planning attorney and CPA with over 35 years of experience, I’ve seen this scenario play out far too often. Trusts are complex, and beneficiaries frequently lack the financial expertise to understand the nuances of trust administration. While a trustee has a legal duty to keep beneficiaries “reasonably informed” and provide a formal accounting—as outlined in Probate Code § 16060 & § 16062—that duty can be unwittingly surrendered.

What Does an Accounting Entail?

An accounting isn’t just a list of transactions. It’s a detailed report, prepared under strict rules, showing every asset, income stream, expense, and distribution made by the trustee over a specific period. It’s essentially a financial autopsy of the trust. A proper accounting includes beginning and ending asset values, a breakdown of all income received (dividends, interest, rent, etc.), expenses paid (property taxes, insurance, trustee fees), and distributions to beneficiaries. Crucially, it must also demonstrate that the trustee acted prudently and in accordance with the trust document and California law.

How Can a Beneficiary Waive Their Accounting Rights?

Waivers come in a few forms. The most dangerous is an implied waiver. This occurs when a beneficiary repeatedly accepts information from the trustee without requesting a formal accounting. For example, if your trustee sends you annual summaries of trust income and expenses, and you simply nod along without questioning anything, a court could find you’ve waived your right to a full accounting. A written waiver is far more explicit, but even that isn’t foolproof.

California courts scrutinize written waivers carefully. The document must be clear, conspicuous, and acknowledge the beneficiary understands the significance of relinquishing their right to an accounting. It should also specifically state that the beneficiary is giving up their right to challenge the trustee’s actions based on financial irregularities. Merely signing a release form as part of a settlement agreement isn’t enough; it must directly address the accounting issue.

Why Is Waiving an Accounting So Risky?

The biggest risk is that you’re relying on the trustee’s self-reporting. Trustees are human, and even well-intentioned ones can make mistakes. Worse, some trustees deliberately mismanage trust assets or engage in self-dealing – using trust funds for their own benefit. Without an independent accounting, these actions can go undetected for years, eroding the trust estate. The CPA advantage here is immense. As a CPA, I understand how to trace assets, identify red flags, and value investments accurately. A step-up in basis, capital gains considerations, and proper valuation can save a family substantial tax dollars that an attorney alone may not catch.

What If I Already Waived My Rights?

It’s not necessarily a lost cause. California law allows a beneficiary to challenge a waiver if they can prove fraud or undue influence. However, the burden of proof is high. You’ll need to present compelling evidence that the trustee intentionally misled you or pressured you into signing the waiver. This is where documentation becomes critical. Keep copies of all correspondence with the trustee, any financial summaries they’ve provided, and any records related to the trust.

What Should You Do Now?

Before accepting any information from your trustee, demand a formal accounting prepared by an independent, qualified professional. Don’t settle for “trust me” answers or piecemeal summaries. If the trustee refuses or drags their feet, consult with an experienced estate planning attorney immediately. You may need to file a petition to compel the accounting, potentially charging the trustee for your legal fees—as allowed under Probate Code § 16060 & § 16062. Protecting your inheritance requires vigilance, and a thorough accounting is often the first line of defense.

What separates an efficient California probate process from a drawn-out conflict over authority and assets?

California probate is designed to provide court-supervised transfer of property, yet cases often break down when authority is unclear, required steps are missed, or disputes arise over assets, notice, and fiduciary conduct. When the process is misunderstood, families can face avoidable delay, escalating conflict, and increased exposure to creditor issues, hearings, or litigation before the estate can close.

California probate is most manageable when authority is documented early, assets are classified correctly, and procedure is followed consistently from petition through closing. When the process is approached with realistic expectations about notice, claims, accounting, and dispute risk, the estate is more likely to move toward closure without avoidable conflict or delay.

Verified Authority on California Beneficiary Rights

• Statutory Notification Window (The “120-Day Rule”): California Probate Code § 16061.7
  This is the most critical statute for beneficiaries. Once a trustee serves this formal notice, you have exactly 120 days to file a contest. If you miss this deadline, you are generally forever barred from challenging the validity of the trust, regardless of the evidence you have.
• Right to Accounting & Information: California Probate Code § 16060 (Duty to Inform)
  Trustees have a mandatory legal duty to keep beneficiaries “reasonably informed” about the trust and its administration. Under Probate Code § 16062, most trustees must provide a formal financial accounting at least once a year. If they refuse, the court can compel them to do so.
• Inheriting Real Estate (Prop 19): California State Board of Equalization (Prop 19)
  Beneficiaries must understand that inheriting a home no longer guarantees low property taxes. Under Prop 19, to avoid reassessment to current market value, the child must make the home their primary residence within one year of the parent’s death.
• No-Contest Clause Enforceability: California Probate Code § 21311
  Fear of disinheritance often stops beneficiaries from fighting for their rights. However, this statute clarifies that a No-Contest clause is only enforceable if the contest is brought without “probable cause.” If you have a reasonable basis for your claim, your inheritance is likely safe.
• Recovering Trust Assets (Heggstad): California Probate Code § 850 (Heggstad Petition)
  If a beneficiary finds that a parent intended an asset to be in the trust but failed to sign the deed or change the account title, a Section 850 Petition allows the court to “transfer” that asset into the trust without a full probate proceeding.
• Removal of a Bad Trustee: California Probate Code § 15642
  Beneficiaries have the right to petition for the removal of a trustee who is unfit. Grounds for removal include excessive compensation, inability to manage finances, or “excessive hostility” toward beneficiaries that interferes with the trust’s administration.