QIM 33  |  Part 2 of 5  |  Law Desk & Elder Abuse

A trustee tells the family the trust is empty, so there is nothing to account for. California law does not work that way.

A conversation between Ava and Michael

Ava: Michael, a common standoff: a beneficiary asks the trustee for an accounting, and the trustee answers that the trust is unfunded — there are no assets, so there is nothing to account. Is that a real defense?

Michael Benavides, Esq.: It is a common answer, and it is weaker than it sounds. Under California Probate Code section 16062, a trustee generally must account at least annually, at the end of the trust, and on a change of trustee, to the beneficiaries entitled to distributions. The duty to report does not evaporate just because the trustee says the cupboard is bare.

Ava: Isn't the trustee's point that a court can only supervise assets that actually exist?

Michael Benavides, Esq.: That is the theory, and I want to be fair to it: if a trust genuinely holds nothing and never did, there is a real question about what an accounting even covers. But the dispute is usually not 'was it always empty.' It is 'what happened to what used to be there.' An accounting is precisely the tool that answers that — it forces a statement of receipts and disbursements, so a beneficiary can see what came in and where it went.

Ava: What if property left the trust before the settlor died — say a house was transferred out months earlier?

Michael Benavides, Esq.: Then you are often looking at two moves at once. The accounting establishes the paper trail, and a Probate Code section 850 petition — sometimes called a Heggstad petition in the funding context — can ask the court to determine that an asset belongs in the trust and should be brought back in. Section 850 is the vehicle for disputes over who really owns property connected to an estate or trust.

Ava: So 'unfunded' can actually invite scrutiny rather than end it.

Michael Benavides, Esq.: Often, yes. A bare assertion that there is nothing to see tends to raise the exact question a court wants answered. Now the honest caveat: whether an accounting is compelled, and what a section 850 petition recovers, depends heavily on the trust instrument, the transfers, and the evidence. This is a fact-intensive area — it is genuinely complicated, and outcomes vary.

Ava: The headline for a worried beneficiary?

Michael Benavides, Esq.: 'The trust is empty' is a claim, not a shield. California law gives beneficiaries tools to test it.

Disclaimer

Attorney advertising. This is general information about California law, not legal advice, and reading it creates no attorney-client relationship. Trust and probate litigation is highly fact-specific; statutes and court rules change and courts apply them differently to different facts. Some points below are expressly flagged as unsettled or discretionary. Confirm the current rules and how they apply to your situation with a licensed California attorney before acting. Michael Benavides, Esq. — California State Bar No. 270714. Ava Benavides is an editorial brand voice, not an attorney, and does not provide legal analysis.