What is the Penalty for an Inaccurate Trust Accounting?

A trust accountant in a jacket and white shirt preparing an accurate trust accounting in California for a trustee.

Trust accounting in California is an essential form of transparency and, ultimately, protection for beneficiaries. Legally, trustees must provide beneficiaries with this financial statement that illustrates how they are administering the trust at least once annually. But simply preparing an accounting is not enough. Trust accountings must be accurate and comply with the probate code, requiring the expertise of a trust accountant.

At Marcia L. Campbell, we have provided CPA trust accounting throughout California for years. With our help, you will not have to worry about inaccuracies or non-compliance. The penalty for inaccurate accounting can vary. Read our blog to find out more.

Related Article: How Do You Validate a Trust Accounting for a Trust Litigation Attorney?

What is the Penalty for Inaccurate Trust Accounting?

There can be penalties for inaccurate trust accounting in California, but this penalty depends on several factors and varies from situation to situation.

One of the most common situations is when a trustee makes a mistake in the accounting. In these situations, beneficiaries can challenge the accounting and request you to prepare a new one. Beneficiaries may challenge an accounting for reasons such as:

  • An incomplete, inaccurate, false, or fraudulent accounting
  • The mismanagement of trust assets
  • The waste of trust assets
  • The theft of trust assets
  • Failure to fully account for trust assets
  • Failure to make trust assets productive


“In most cases, issues with an accounting are more the result of a lack of good recordkeeping than they are malicious intent. In these situations, the errors are usually small and easy to remedy without court intervention. But this is not always the case.”Marcia L. Campbell, expert trust accountant with years of experience preparing court-approved and accurate accounting.

In other situations, the potential penalty can be more severe. An inaccurate accounting can be considered a breach of their fiduciary duty. The penalty for breaching this duty can result in legal repercussions, surcharges, and even removing a trustee from his or her position.

Trustees can resolve most issues with accuracy by providing more information and explaining the mistake. If inaccuracies signal a breach of duty, these cases can go to trial, require costly litigation, and result in more severe repercussions.

Related Article: How Do You Know if a Trust Accounting is Accurate?

CPA Trust Accounting in California

Trust accounting is a financially complicated task with significant implications for a trust, its beneficiaries, and the trustee. When a trustee prepares an accounting, the margin for error is slim, and inaccuracies can have severe repercussions. Only an expert trust accountant has the skills and experience to ensure accuracy and compliance.

Fortunately, at Marcia Campbell CPA, we provide specialty trust accounting services that cater to each client’s unique circumstances and ease this burden. Visit our contact page and schedule a consultation so you never have to worry about trust accounting accuracy again.

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