How to resolve AdBlock issue? 
News
- Details
- Written by: Dennis Fordham
California statutory law requires a trustee to account annually to current trust beneficiaries, i.e., those who are currently entitled to receive distributions of income and principal during the accounting period.
Any trustee, other than the settlor(s) who established the trust, has a duty to account.
Let us discuss some basic concepts regarding the trustee’s duty to account.
The trust instrument itself may either broaden or narrow the trustee’s statutory duty to account.
A trust might broaden the scope of who receives an accounting, for example, to include future beneficiaries. Alternatively, the trust might eliminate the requirement altogether.
That said, even when the trust waives the accounting requirement, a trustee may still provide one to protect himself against possible claims by unhappy beneficiaries alleging a breach of one or more trustee duties.
Furthermore, a beneficiary may still petition the court for an accounting when there is reason to believe that the trust was mishandled.
From a trustee’s perspective a trust accounting is very important. It helps him discharge his legal responsibilities within a set time.
An accounting that is mailed to beneficiaries must be accompanied by a legal notice that meets specific legal requirements to alert the recipients of their legal rights to dispute the accounting within three years of receipt.
A trustee may shorten this time to 30 days by petitioning the court to approve the accounting with notice to all beneficiaries. Without an accounting the trustee remains indefinitely liable to future court actions.
Broadly speaking, the accounting must sufficiently detail the assets, transactions, liabilities, and persons hired by the trustee. Each is disclosed in the relevant accounting schedule.
Thus, a trustee keeps all underlying documents related to asset values (such as appraisals) and financial transactions (such as transactional invoices, receipts and monthly financial statements). An accounting that is too generalized will be insufficient.
A trust accounting should meet California Probate Code requirements in case it is submitted for court approval. California trust accountings have their own unique set of rules under the California Probate Code, not to be confused with either tax or financial accountings as prepared by a CPA for business or tax purposes. A balanced trust accounting is one where the sum of all the charges equals the sum of all the credits.
In order to balance the charges and credits the concept of “carry value” is used in trust accountings. Carry value represents, in dollar terms, the amount of responsibility that the trustee carries with respect to each asset.
Carry value is not the same as fair market value, net value or current value. For example, a successor trustee who steps in at the death of the settlor/trustee to distribute the trust estate will use the date of death appraisal value of each trust asset as its carry value.
Liabilities are not subtracted and do not count in balancing an accounting, although are disclosed in a separate schedule of liabilities.
An asset’s carry value remains constant throughout the accounting even though its actual present value may change during the same period. This is because the carry value is a substitute for the actual asset itself (a constant) and the trustee’s responsibility for the asset does not change with changes in its value.
Thus, for example, a successor trustee of a deceased settlor’s living trust that owns a house with a carry value of $250,000 can still show he discharged his duty when four months later he distributes the house even if its value has declined to say $225,000.
There are many more technicalities to preparing a trust accounting than discussed above.
Suffice it to say that a trustee typically needs the professional assistance of an attorney and/or accountant to prepare the trust accountings to meet his duty to account.
Dennis A. Fordham, attorney (LL.M. tax studies), is a State Bar Certified Specialist in Estate Planning, Probate and Trust Law. His office is at 55 First St., Lakeport, California. Dennis can be reached by e-mail at
- Details
- Written by: Dr. Tony Phillips
When someone says “Once in a Blue Moon,” you know what they mean: Rare, seldom, even absurd.
This year it means Friday, Aug. 31.
For the second time this month, the Moon is about to become full.
There was one full Moon on Aug. 1 and 2, and now a second is coming on Aug. 31.
According to modern folklore, whenever there are two full Moons in a calendar month, the second one is “blue.”
Cue up the Elvis records! “Blue Moon…. You saw me standing alone, without a dream in my heart, without a love of my own.” In song and literature, blue moons have long symbolized lost love and melancholy. Elvis set the standard for lunar heartbreak in his 1956 pop hit “Blue Moon.”
But will the moody Moon of Aug. 31 actually turn blue? Probably not.
Most blue Moons look pale gray and white, indistinguishable from any other Moon you’ve ever seen. Squeezing a second full Moon into a calendar month doesn’t change the physical properties of the Moon itself, so its color remains the same.
With that caveat in mind, however, be aware that on rare occasions it can happen.
A truly-blue Moon usually requires a volcanic eruption. Back in 1883, for example, people saw blue moons almost every night after the Indonesian volcano Krakatoa exploded with the force of a 100-megaton nuclear bomb. Plumes of ash rose to the very top of Earth’s atmosphere, and the Moon … it turned blue!
Krakatoa’s ash was the reason. Some of the plumes were filled with particles 1 micron wide, about the same as the wavelength of red light. Particles of this special size strongly scatter red light, while allowing blue light to pass through. Krakatoa’s clouds thus acted like a blue filter.
People also saw blue-colored Moons in 1983 after the eruption of the El Chichon volcano in Mexico. And there are reports of blue Moons caused by Mt. St. Helens in 1980 and Mount Pinatubo in 1991.
Certain forest fires can do the same trick. A famous example is the giant muskeg fire of September 1953 in Alberta, Canada. Clouds of smoke containing micron-sized oil droplets produced lavender suns and blue Moons all the way from North America to England.
There are plenty of wildfires burning in the hot, dry USA this month. If any of them produce smoke with an extra dose of micron-sized particles, the full Moon might really turn blue.
On the other hand, maybe it will turn red. Often, when the moon is hanging low, it looks red for the same reason that sunsets are red. The atmosphere is full of aerosols much smaller than the ones injected by volcanoes. Measuring less than a micron in diameter, these aerosols scatter blue light, while leaving the red behind. For this reason, red Blue Moons are far more common than blue Blue Moons.
Sounds absurd? Yes, but that’s what a Blue Moon is all about. Step outside at sunset on Aug. 31, look east at the moonrise, and see what color presents itself.
Dr. Tony Phillips works for the National Aeronautics and Space Administration.
- Details
- Written by: Lake County News reports
LAKEPORT, Calif. – For the price of a small donation, on Friday community members can help feed Lake County’s hungry and also enjoy the Lake County Fair for free.
The Lake County Fair is partnering with Lake County CAN for an inaugural fair food drive.
On Friday, from 4 p.m. to 7 p.m., the fair will offer free entrance to each person who brings four cans or four items of nonperishable food.
Suggested donations are tuna, beef stew, fruit, soup, spaghetti sauce, macaroni and cheese, dried beans and rice mix.
Lake County CAN distributes donations to seven food pantries throughout Lake County at Methodist Churches in Clearlake, Clearlake Oaks, Kelseyville, Lakeport, Lower Lake, Middletown and Upper Lake.
These food pantries are available to anyone in need, regardless of their beliefs.
For more information phone 707-987-3379 or 707-263-6181.
- Details
- Written by: Lake County News reports
LAKEPORT, Calif. – The Lake County Fair is officially open for 2012.
Over the next several days, the fair will offer entertainment for all ages – rides, shows, exhibits, animals and a variety of vendors.
The fair parade made its way through Lakeport Thursday night, ending at the fair’s main gate, where the grand marshals – members of the Lake County Military Funeral Honors Team – took part in the ribbon cutting that opens the event.
The fair runs through Sunday, Sept. 2.
The video below offers a look at the fair’s first night.