The Adviser’s Guide to the Revised Trust Accounting Rules [Download]

Most states over the last few years have enacted significant changes in the state trust laws regarding the definition of accounting income and principal. For the most part, these laws and rules apply to existing trusts and newly-formed trusts. These state laws have a dramatic effect on the rights of trust beneficiaries as well as the rights and liabilities of trustees.

CPAs and other professional advisers to trustees are placed in a difficult position for a number of reasons. They may not know that the state trust laws have been changed, or do not know what the trust accounting changes are or how to apply the state trust laws. Further, they may believe that the trustee or the attorney for the trustee is responsible for the interpretation of the state trust accounting rule changes. In addition, many CPAs are not trained in interpreting these revised state trust laws.  A professional who acts as a trustee must know the trust accounting rules as well.  The failure to know the rules may result in ethics and malpractice issues.