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Trust Financial Statements

“Fiduciary accounting is an important duty of the trustee and can be a minefield that leads to conflict with beneficiaries if not approached with the right knowledge and skills. For this reason, we highly recommend a newly appointed trustee seek out the services of experienced CPA and trust attorney for advice and knowledge of the roles and responsibilities of a trustee.”

Fiduciary accounting is one of the most unique areas of financial reporting because the terms of the trust can dictate what is included in fiduciary accounting income, and when the trust document is silent or ambiguous with respect to income, the trustee must look to local law (statutes in the state of the trust’s situs) for clarification. 

Our experience is that most trustees take on the fiduciary duty because a parent, sibling or someone close to them asks them to accept the responsibility. However, when accepting the appointment, many do so without knowledge of the Uniform Principal and Income Act and the Uniform Prudent Investor Act. In addition they don’t fully understand the role of a fiduciary, which can be summed up as:

  • The duty of management;
  • The duty of loyalty;
  • The duty to account; and
  • The duty to disclose.

Fiduciary accounting is an important duty of the trustee and can be a minefield that leads to conflict with beneficiaries if not approached with the right knowledge and skills. For this reason, we highly recommend a newly appointed trustee seek out the services of experienced CPA and trust attorney for advice and knowledge of the roles and responsibilities of a trustee.

Here is what you can expect when you engage us to prepare your annual fiduciary financial statements . . .

  • We will read the trust instrument to gain an understanding of the terms applicable to fiduciary accounting income, including trust specific requirements for allocation of principal and income transactions;
  • We will gain an understanding of the uniform acts and model codes as adopted in the state of situs; and
  • We will help you design and present financial statements that provide relevant financial information and disclosures to the beneficiaries.

For more information, please call us at (775) 828-5027 or send us an email.