A trustee's duty extends beyond liability for breach of a
fiduciary duty. One of the trustee's primary responsibilities is to provide
information and account to the trust's beneficiaries. Discharging this duty to
account benefits the trustee as well as the beneficiaries. The Probate Code
governs the trustee's actions in California. In this Analysis, Margaret M. Hand
discusses a trustee's duty to account. She writes:
 Aid to Performance of Other Duties
In some circumstances, the trustee may be absolved of his or her duty to
account, yet nevertheless find accounting an unavoidable necessity. Consider,
for example, the surviving spouse who serves as trustee of a QTIP Trust from
which the trustee may distribute only net income and no principal. Assume the
trust instrument does not define "net income," which is therefore
defined by California's Uniform Principal and Income Act. As trustee, the
surviving spouse would be required to distribute to herself all the trust's
income, but because she is both trustee and the sole person entitled to current
distributions of income, she would not be required to account. Yet she could
not simply subtract her disbursements from her receipts and pocket the
difference. To calculate the net income to which she is entitled, she must
subtract from "receipts allocated to income" those
"disbursements made from income" during the "accounting
period." Each of these three terms is defined by California's Principal
and Income Act (hereafter, the Act) apportions receipts and disbursements
between principal and income. This hypothetical, but common, trustee could
determine the amounts to which she is entitled only by preparing schedules of
receipts, gains on sales, disbursements, losses on sales and distributions.
Essentially, this trustee must prepare an account or risk distributing too much
or too little.
The trustee considering
adjustments under the Uniform Principal and Income Act may not exercise the
power to adjust without first computing the trust's fiduciary accounting income
and comparing that amount with the total return on investment. This comparison
requires the preparation of detailed schedules of receipts, gains, losses and
disbursements, which schedules constitute the bulk of the trustee's account.
 Accounting Protects the Trustee
[a] Three-Year Statute of Limitations
There is a three-year statute of limitations on actions by beneficiaries
against trustees for breach of trust. This statute begins running either
when the beneficiary receives the trustee's account that "adequately
discloses the existence of a claim against the trustee for breach of
trust," or when the beneficiary discovers or reasonably should discover
the "subject" of the claim. This statute of limitations is an
absolute bar to claims against the trustee and nothing provides the trustee
with greater protection, certainly not waivers of account.
(footnotes and citations omitted)
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