You’re entitled to information. If you’re a beneficiary of a trust, whether it’s a family trust, a testamentary trust set up by a parent’s will, or an investment vehicle, the trustee managing that trust owes you a fundamental obligation: to show you the books.
This is the duty to account. It’s not optional. It’s not discretionary. It sits at the core of what it means to be a trustee.
And when trustees fail to meet this obligation, disputes follow. Sometimes quickly. Sometimes quietly until something tips over: an unexpected tax bill, a sale, a distribution that doesn’t make sense. Then suddenly everyone’s talking to lawyers.
You might be here because you’ve asked for information and been met with silence, delay, or vague promises. Or you might be a trustee wondering what you actually need to provide and how often. Either way, the rules are clearer than most people realise.
This article walks through what a trustee’s duty to account actually requires, what happens when trustees don’t comply, and what you can do about it.
Key Takeaways
- Trustees must maintain accurate, up-to-date accounts and be ready to show them to beneficiaries upon reasonable request. It’s not about trust. It’s about legal obligation.
Beneficiaries have the right to inspect trust accounts and understand how trust property is being managed. This right exists whether or not the trust deed mentions it.
Failure to account properly can result in court orders compelling disclosure, removal of the trustee, and even personal liability for losses caused by poor record-keeping or obstruction.
Imagine you’re a beneficiary of a family trust. Your brother is the trustee. For years, you’ve received sporadic distributions. You’ve seen your name on tax returns showing income attributed to you. But you’ve never seen a set of accounts. You’ve never seen a clear statement of how much the trust owns, what it earns, or why distributions are made the way they are.
You ask. You’re told “it’s all handled by the accountant” or “don’t worry about it” or “I’ll send something through soon.” Months pass. Nothing arrives.
Is that acceptable?
No. It’s not. And it’s a breach of one of the most basic obligations a trustee owes.
What a Trustee’s Duty to Account Actually Requires
The duty to account is not a vague promise of transparency. It’s a concrete, enforceable legal obligation.
Here’s what it means on the ground.
A trustee must keep proper, accurate, and up-to-date accounts of all trust property and transactions. That includes income received, expenses paid, distributions made, investments bought and sold, and assets held. Every decision that touches trust property should be documented and able to be explained.
Then, and this is where many trustees stumble, a trustee must be ready to produce those accounts when a beneficiary reasonably asks for them. Not when it’s convenient. Not “when things settle down”. When asked.
The accounts need to be in a form that a beneficiary can understand. You don’t need to be a forensic accountant to see how a trust is being run. If the accounts are so opaque that no one can follow them, the trustee hasn’t met the obligation.
This duty comes from the fiduciary nature of trusteeship. A trustee holds property for others. Those others, the beneficiaries, have a right to see how their property is being managed. Courts have been enforcing this for centuries.
In practical terms, a set of trust accounts should show:
- All income received by the trust (rent, dividends, interest, trading income)
- All expenses and payments made (management fees, professional fees, loan repayments)
- All distributions to beneficiaries (amounts, dates, who received what)
- Current assets and liabilities (cash, property, investments, loans)
- Significant transactions (property sales, major purchases, loans made or received)
It’s not enough to keep a shoebox of receipts or a few spreadsheets on your laptop. The records need to be organised, retrievable, and capable of being verified.
The duty to account is not a bureaucratic formality. It’s how beneficiaries know whether a trustee is meeting their core obligations: acting in beneficiaries’ interests, avoiding conflicts, and managing trust property prudently.
What Beneficiaries Are Entitled to See, and What They’re Not
You’re entitled to see the trust accounts. That right exists whether or not the trust deed explicitly says so. It flows from your status as a beneficiary.
But “trust accounts” is not the same as “every document that mentions the trust”.
Let’s draw some lines.
What you are entitled to see:
The accounts themselves: statements showing income, expenses, distributions, and the trust’s financial position. Typically prepared annually, though you can request updates more frequently in some circumstances.
Financial statements prepared for tax purposes. A beneficiary is entitled to understand the trust’s overall financial health, not just what they personally received.
Records of distributions. Who got what, when, and why (to the extent the trustee exercised discretion).
Details of trust assets. You’re entitled to know what the trust owns and how those assets are being managed.
What you might not be entitled to see without a good reason:
Trustees’ internal deliberations. Minutes of trustee meetings or notes about how a discretion was exercised can sometimes be withheld. Courts have recognised that trustees need space to make decisions without every thought process being scrutinised. But this is a narrow exception, and it doesn’t extend to hiding financial information.
Confidential third-party information. For example, if the trust holds shares in a company, you might not automatically be entitled to that company’s internal financial records. But you are entitled to know what the trust’s interest is worth.
Documents unrelated to trust administration. Letters between the trustee and their personal advisers about unrelated matters. Private correspondence. The line here is: does it relate to the trust’s finances and administration? If yes, you’re likely entitled to it.
The test courts apply:
Is the request reasonable? Is the beneficiary genuinely seeking to understand how the trust is being run, or are they fishing for something to complain about?
A beneficiary asking for annual accounts, a list of assets, and an explanation of distributions is making a reasonable request. A beneficiary demanding hundreds of pages of emails, bank statements going back decades, and copies of every invoice is likely crossing into unreasonable territory. Courts have found that trustees are not obliged to respond to “voluminous or lengthy queries” that are oppressive or designed to harass.
But here’s the reality: most disputes don’t involve unreasonable beneficiaries making excessive demands. They involve trustees who won’t provide basic information.
If you’re a beneficiary, keep your initial request clear, specific, and reasonable. Ask for the trust’s financial statements for the last three years, a list of current assets, and a summary of distributions. That’s hard for any trustee to refuse without looking obstructive.
Common Ways Trustees Fall Short on Their Duty to Account
Trustees don’t usually wake up and decide to breach their duties. Most failures happen through inattention, poor systems, or a misguided belief that “it’s my decision, I don’t need to explain myself”.
Here are the patterns you see again and again.
No accounts at all.
This is more common than you’d think, especially in small family trusts. The trustee makes distributions, pays expenses, uses trust money, but never prepares a formal set of accounts. Everything’s on a spreadsheet, or worse, in the trustee’s head.
That’s not compliant. If a beneficiary asks for accounts and none exist, the trustee is exposed.
Accounts prepared but not provided.
The accountant prepares financials for tax purposes, but the trustee never shares them with beneficiaries. Sometimes the trustee genuinely doesn’t realise they’re supposed to. Other times, it’s deliberate: keeping beneficiaries in the dark reduces scrutiny.
Accounts that are incomplete or inconsistent.
The beneficiary receives something, but it doesn’t reconcile. Income doesn’t match distributions. Assets seem to have disappeared or been valued inconsistently. Loan balances change without explanation.
If accounts are provided but don’t make sense, that’s effectively the same as not providing accounts. The duty is to account properly, not to produce something that looks like accounts but obscures the truth.
Ignoring reasonable questions.
A beneficiary asks a straightforward question: “Why did the trust lend money to [related party]?” or “What happened to the property that was sold in 2022?” The trustee ignores the question, changes the subject, or gives a vague answer.
Courts take a dim view of trustees who stonewall. If you can’t explain a transaction involving trust property, you’re in breach.
Unexplained losses or transactions.
The trust owned an asset. It’s now gone, or worth significantly less. The accounts show a loss, but no one can explain how it happened. Or the trustee borrowed money from the trust and didn’t document it properly.
A trustee who cannot account for trust property, literally explain where it went and why, is in serious trouble.
Delays that become obstruction.
“I’ll send it next week.” Three months later, nothing. A year later, nothing.
At some point, delay becomes refusal.
Poor record-keeping often looks innocent until there’s a dispute. Then it becomes evidence of breach. If you’re a trustee and your accounts aren’t in a state where you could hand them to a beneficiary tomorrow and feel confident, you need to fix that now.
Practical Steps If You’re Not Getting the Information You Need
You’ve asked. You’ve been polite. You’re still waiting.
What do you actually do?
Step one: make a clear, written request.
Put it in an email or a letter. Be specific. List exactly what you want:
- Trust financial statements for [years]
- A list of current trust assets and liabilities
- Details of distributions made in the last [x] years
- An explanation of [specific transaction or concern]
Give a reasonable timeframe. Twenty-one days is standard for formal requests.
Keep a copy. You’ll need a paper trail if this escalates.
Step two: follow up in writing if there’s no response.
Send a second request. Note that you made an initial request on [date], that you’re entitled to this information as a beneficiary, and that you expect a response within [timeframe].
Still polite. Still clear. But firmer.
Step three: involve your accountant or lawyer.
If you’re met with continued silence or evasion, it’s time to get advice.
An accountant can review whatever information you do have and identify gaps or red flags. They can also help you frame your request in a way that makes it clear you know what you’re talking about.
A lawyer can write a formal letter to the trustee. That letter will reference the trustee’s legal obligations, note the failure to comply, and usually include a deadline and a warning that court proceedings may follow.
Sometimes that’s enough. Trustees who’ve been ignoring a beneficiary often respond quickly when a lawyer is involved.
Step four: consider an application to the court.
If the trustee still won’t comply, you can apply for a court order compelling them to provide accounts or answer specific questions.
This is not a step you take lightly. Court proceedings are expensive and can permanently damage relationships. But sometimes it’s the only option.
The court has broad powers. It can order the trustee to:
- Prepare and file proper accounts
- Provide specific documents or explanations
- Allow inspection of trust records
- Answer interrogatories (formal written questions under oath)
If the trustee has been obstructive without good reason, the court may also order them to pay your legal costs.
In serious cases, where the trustee has consistently failed to meet their obligations, mismanaged trust property, or acted in bad faith, the court can remove them and appoint a new trustee.
Timing matters.
The longer you wait, the harder it becomes to reconstruct what happened. If you suspect something is wrong, act early. Delay can be costly.
Before you go to court, document everything. Every request you made, every response (or non-response), every concern you raised. Courts look favourably on beneficiaries who’ve tried to resolve things reasonably and trustees who’ve refused to engage.
Legal Consequences When a Trustee Fails to Account
A trustee who doesn’t meet the duty to account isn’t just annoying. They’re in breach of trust.
And breaches have consequences.
Court orders to account.
The most direct remedy is an order that the trustee file proper accounts with the court. The court will set out what must be included, the timeframe, and the format.
If the accounts reveal issues, unexplained losses, improper transactions, breaches of duty, further orders can follow.
Adverse inferences.
If a trustee has failed to keep proper records or destroyed documents, a court may draw adverse inferences against them.
In plain terms: if you can’t prove you acted properly, the court may assume you didn’t.
That shifts the burden. Instead of the beneficiary having to prove breach, the trustee has to prove compliance. And if the records don’t exist, they can’t.
This can lead to personal liability for losses the trust suffered.
Orders for repayment or compensation.
If the trustee misapplied trust funds, made an improper distribution, or profited personally from trust property, they can be ordered to repay or compensate the trust.
A trustee holds trust property on trust. If it’s gone and shouldn’t be, they’re personally liable to make it good.
Removal as trustee.
Persistent failure to account, refusal to provide information, or evidence of mismanagement can lead to removal.
Courts have the power to remove a trustee and appoint a replacement. It’s a drastic step, but it’s available when a trustee has lost the confidence of the beneficiaries and the court.
Costs orders.
If a beneficiary is forced to go to court to get basic information, and the trustee had no reasonable basis for refusing, the trustee may be ordered to pay the beneficiary’s legal costs personally, not from the trust.
That’s a significant financial risk for a trustee who’s been obstructive.
Criminal liability in extreme cases.
If a trustee has deliberately misappropriated trust funds or engaged in fraud, criminal liability is possible. That’s rare, but it happens.
Most duty to account disputes don’t reach that level. But they can if dishonesty is involved.
Trustees often underestimate the personal risk of failing to account. You’re not just managing someone else’s money. You’re personally liable if you get it wrong. That includes being unable to explain where trust money went because you didn’t keep proper records.
Good Practice for Trustees: Staying Compliant and Avoiding Disputes
If you’re a trustee, the duty to account shouldn’t feel like a burden. It’s a discipline that protects you as much as it protects beneficiaries.
Here’s what compliance looks like in practice.
Keep accurate, contemporaneous records.
Don’t rely on reconstructing things later. Record transactions when they happen. Use proper accounting software or engage a bookkeeper. Make sure every receipt, invoice, bank statement, and distribution is documented and filed.
You should be able to produce a clear set of accounts at any time.
Prepare annual financial statements.
Even if beneficiaries don’t ask, prepare financials every year. Get your accountant to do it if you’re not confident. Treat it as a non-negotiable part of trust administration.
Annual statements create a clear paper trail and make it easy to respond if a beneficiary does ask for information.
Provide accounts to beneficiaries without being asked.
This is best practice. Send beneficiaries a summary of the trust’s financial position and activity each year. It doesn’t need to be a 50-page report. A few pages covering income, expenses, distributions, and current assets is often enough.
Proactive transparency reduces the risk of disputes. Beneficiaries who are kept informed are less likely to suspect problems.
Respond promptly to reasonable requests.
If a beneficiary asks for information, respond within a reasonable timeframe. If you need more time to compile something, say so. Don’t go silent.
Most disputes escalate because trustees don’t communicate.
Document your decisions.
When you make a discretionary decision, like how much to distribute, or whether to invest in a particular asset, write down why you made that decision.
You don’t need formal minutes for every small choice. But for significant decisions, a short note explaining your reasoning protects you later. It shows you considered your obligations and acted in good faith.
Seek advice when things are uncertain.
If you’re unsure whether a transaction is appropriate, or whether you need to disclose something, ask. Get legal or accounting advice. Don’t guess.
Trustees who seek advice and follow it are in a much stronger position if a dispute arises.
Be clear about what beneficiaries can expect.
Set expectations early. Let beneficiaries know that you’ll provide annual statements, that you’re available to answer reasonable questions, and that you take the role seriously.
That doesn’t mean you give them control. But it means they know you’re accountable.
Manage difficult beneficiaries carefully.
Sometimes a beneficiary makes unreasonable requests or tries to micromanage. You don’t have to comply with every demand.
But you do need to respond professionally. Explain why a request is unreasonable. Offer to provide what is required under your duty to account. Keep a record of your response.
Don’t let frustration turn into non-compliance.
If you’re a trustee and you’re not sure whether your record-keeping is up to standard, ask your accountant or lawyer to audit your files. It’s far cheaper to fix problems before a beneficiary raises them than to deal with a dispute later.
How This Plays Out in Family Trusts and Business Structures
The duty to account applies across all types of trusts. But the practical dynamics differ depending on the structure and relationships involved.
Family trusts.
These are the most common setting for duty to account disputes. Often one family member is trustee, others are beneficiaries. Relationships are close, which can make things better, or much worse.
In functional families, the trustee provides information informally. Everyone knows roughly what the trust owns, how it’s used, and why distributions are made.
In dysfunctional families, the duty to account becomes a flashpoint. Suspicion builds. One sibling thinks another is taking advantage. Parents disagree about transparency. No one wants to be the first to “lawyer up”, but eventually someone does.
The lesson: even in families, treat the trust formally. Provide accounts. Document decisions. Don’t assume goodwill will carry you through.
These are trusts created by a will, often for the benefit of children or a surviving spouse. The trustee might be a professional (like a lawyer or accountant) or a family member.
Duty to account disputes often arise when:
- The surviving spouse is trustee and adult children feel excluded from information.
- A professional trustee charges fees that beneficiaries think are excessive and won’t explain.
- Distributions favour one class of beneficiaries over another and no one can see the accounts.
The stakes can be high. Testamentary trusts often hold significant assets. Beneficiaries who feel shut out can become litigious quickly.
Clear, regular reporting is essential. If you’re a professional trustee, that’s part of the service. If you’re a family member trustee, get advice on what reporting is expected.
Business and investment trusts.
These trusts are used to hold trading businesses, property portfolios, or investments. The trustee might be a company controlled by one or more directors. Beneficiaries might be family members, business partners, or investors.
Duty to account disputes often involve:
- Allegations that the controlling director is using trust funds for personal benefit.
- Concerns about related-party transactions (the trust lending money to the director’s other companies, for example).
- Minority beneficiaries demanding transparency about investment decisions or business performance.
These disputes can overlap with oppression claims, breach of directors’ duties, and tax issues. They’re often complex and high-value.
The same principles apply. Trustees must account. Beneficiaries have a right to see the books. If the trust is being used as a vehicle for improper conduct, beneficiaries can take action.
Tax and ATO interactions.
One common trigger for duty to account disputes: a beneficiary receives a tax return showing trust income attributed to them, but they’ve never seen trust accounts and don’t understand where the income came from.
That raises two problems. First, the beneficiary may owe tax on income they didn’t receive in cash. Second, they’re entitled to understand how that income was calculated and whether the trust’s tax position is sound.
If the trustee can’t or won’t explain, the beneficiary is left exposed to tax risk without transparency.
ATO compliance also depends on proper record-keeping. A trustee who doesn’t keep adequate records risks not just beneficiary disputes, but also tax penalties and interest.
The structure of the trust doesn’t change the core obligation. Whether it’s a family trust or a multimillion-dollar investment vehicle, the duty to account applies. The only difference is the scale and complexity of what needs to be accounted for.
When to Get Advice, and What a Lawyer Can Actually Do in These Situations
You don’t need to rush to a lawyer the moment a trustee is slow to respond. But you also shouldn’t wait until the relationship has completely broken down and records have gone missing.
Here’s when to get advice.
When the trustee refuses to provide basic information.
If you’ve made a reasonable request in writing and received no response, or a response that doesn’t address your concerns, it’s time.
A lawyer can assess whether your request was reasonable, advise on next steps, and write a letter that often prompts compliance.
When the accounts you receive don’t make sense.
You’ve been given something, but the numbers don’t reconcile. Transactions are unexplained. Assets have disappeared. Income is inconsistent with what you’d expect.
A lawyer (working with a forensic accountant if necessary) can review what you’ve been given, identify gaps, and advise on whether there’s evidence of breach.
When you suspect the trustee has misused trust funds.
If you have reason to believe the trustee has taken money, made secret profits, or used trust property for personal benefit, get advice immediately.
The longer you wait, the harder it becomes to trace assets and recover losses.
When you’re a trustee and a beneficiary is making aggressive demands.
If you’re facing a beneficiary who’s threatening litigation, demanding excessive information, or accusing you of wrongdoing, don’t ignore it. Get advice on your obligations, what you can reasonably refuse, and how to respond.
Sometimes disputes escalate because trustees don’t know their rights either.
Review the trust deed and identify what the trustee’s specific obligations are. Every trust deed is different, and while the duty to account applies broadly, the deed may set out particular requirements.
Draft a formal letter to the trustee (or, if you’re the trustee, to the beneficiary) setting out rights and obligations.
Advise on whether court proceedings are necessary or whether negotiation, mediation, or a formal request for information is likely to resolve things.
Prepare and lodge court applications for orders compelling the trustee to account, answer questions, or allow inspection of records.
If breach is established, pursue remedies: orders for repayment, compensation, removal of the trustee, and costs.
Costs and timeframes:
Duty to account disputes can often be resolved quickly if the trustee complies once a lawyer is involved. A letter of demand, a mediation, and disclosure might resolve things in weeks or a few months.
If the trustee continues to obstruct, court proceedings follow. Timeframes vary, but a relatively straightforward application for an order to account might take 6-12 months. Complex cases with allegations of fraud or significant losses can take longer.
Costs depend on the level of dispute. Early advice and a lawyer’s letter might cost a few thousand dollars. Full litigation can cost tens or hundreds of thousands, depending on the issues and the evidence.
But here’s the key: early advice often prevents litigation. Most trustees comply once they understand the consequences of refusing. Most beneficiaries make better decisions once they understand what they’re actually entitled to and what a reasonable request looks like.
If you’re unsure whether to get advice, ask yourself this: “Can I afford to be wrong?” If the trust holds significant assets, or if your financial position depends on understanding how the trust is being run, the cost of advice is small compared to the cost of getting it wrong.
The Pathway Forward: Clarity and Accountability
The duty to account exists for a reason. Trusts concentrate control in one person, the trustee, while the benefit belongs to others, the beneficiaries. That imbalance only works if the trustee is accountable.
Accountability begins with information. You can’t oversee what you can’t see. You can’t trust what you don’t understand. And beneficiaries shouldn’t have to take trustees’ word for it.
If you’re a beneficiary who’s not getting the information you need, you’re entitled to push. Not aggressively. Not unreasonably. But firmly and clearly. Make your requests in writing. Keep records. Escalate if necessary. You’re not being difficult. You’re exercising a right that the law gives you.
If you’re a trustee, treat transparency as a core part of your role. Keep proper accounts. Provide information proactively. Respond to questions promptly. It’s not about micromanagement. It’s about showing that you take your obligations seriously.
And if things have already broken down, if there’s mistrust, obstruction, or evidence of mismanagement, get advice early. Duty to account disputes don’t get better with time. They get more entrenched, more expensive, and more damaging.
The right approach, handled properly, restores clarity. And clarity is what allows trusts to work the way they’re supposed to: with confidence, accountability, and fairness.
Disclaimer: This article provides general information only and does not constitute legal advice. The content is based on Australian law as at the date of publication. Every trust and every dispute is different. If you’re dealing with a trustee who won’t account, or if you’re a trustee facing demands from beneficiaries, you should seek specific legal advice based on your circumstances.
