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release of liability

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#1 ruby2u


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Posted 08 September 2010 - 06:10 AM

I reside in ca. My mother passed away in feb. 09, and left a revocable trust. I recently recieved an accounting from the trustee's attorney with a letter requesting All beneficiaries sign a waiver of accounting and release of liability for the trustees for the period reflected in the enclosed accounting (03/09-03/10) It goes on to state  If any beneficiary fails or refuses to sign the release the trustees will have no alternative but to proeed with a full court accounting pursuant to Probate Code section 1601. My question is, Is this common ? It makes me think some thing is wrong.

thank you for your time.

#2 pg1067


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Posted 08 September 2010 - 07:04 AM

I'm not sure I understand either your concern or your question about commonality.  I also suspect that your reference to Probate Code Section 1601 is a typo since that section concerns termination of a guardianship.  Rather, I suspect you meant to refer to Section 16000-something.

Section 16062(a) of the Probate Code requires a trustee to "shall account at least annually, at the termination of the trust, and upon a change of trustee, to each beneficiary to whom income or principal is required or authorized in the trustee's discretion to be currently distributed."

The statement that the trustee has "no alternative but to proeed with a full court accounting" doesn't really make a lot of sense.  Nor does it make sense to request a waiver of accounting if an accounting was provided.  As for the release of liability, however, do you "think something is wrong" because you see some problem in the accounting you received?  If not, what is the issue?

A trustee has potential liability to beneficiaries for screwing up, so it is completely common for trustees to seek a release of liability upon the presentation of an accounting.  If you see something wrong in the accounting, then don't sign the release and raise the issue when the trustee takes the matter to court.  If you don't see anything wrong, then I don't really see why you wouldn't sign.  Nevertheless, by all means, consult with a local attorney for advice.

#3 knort4


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Posted 09 September 2010 - 09:03 AM

It doesn't necessarily mean that anything is wrong but it may be an indication that a full accounting will be somewhat expensive and paid for out of the trust funds.  Consult a trust attorney before you make a decision on this, and you also need to discuss with your attorney whether you should be making a request by certified letter to the trustee for an accounting statement for each year the trust has existed, and whether you have the right to also see current bank statements to verify how much is in the trust and whether the trust requires the trustee to post a trustee's bond or whether the trust document specifically exempts the trustee from posting a bond.

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