Trust & Fiduciary Accounting
Fiscal Highlands provides trust and fiduciary accounting services designed to bring clarity, and confidence to trustees, ensuring that beneficiaries receive transparent and understandable reporting.
┃WHO THIS IS FOR┃
This service is designed for individuals, families, and professionals navigating fiduciary responsibilities:
Family members serving as trustees for revocable or irrevocable trusts
Trustees handling incomplete records or transitions
Beneficiaries seeking clarity and transparency
Estate planning attorneys, financial advisors, and CPAs requiring technical fiduciary accounting support
Many trusts name a spouse, sibling, or adult child as trustee. What begins as an expression of confidence within a family often becomes a position carrying significant legal and financial responsibility. Beyond managing investments or paying bills, a trustee is a fiduciary with duties to maintain accurate records, properly allocate transactions between income and principal, and provide clear reporting to beneficiaries. For those who did not anticipate the technical nature of the role, fiduciary accounting can feel unfamiliar and intimidating.
┃WHEN TO CALL┃
Trustees and advisors often seek assistance when:
Trust accounting requirements are unclear or confusing
Allocating income and principal creates questions
Beneficiaries request detailed accounting
Records are incomplete or inconsistent
Trustee transitions are underway
Disagreements regarding distributions arise
Whether you are stepping into a trustee role for the first time or are a professional serving a client, Fiscal Highlands provides the expertise to manage the accounting side of trust administration confidently. Ben Palkowski, a dual-licensed Attorney and CPA, and co-owner of Old Colony Law, a trusts and estates law office, offers solutions for those seeking guidance with trust and fiduciary accounting. Fiscal Highlands offers a uniquely valuable service, providing individualized attention where both legal and accounting perspectives inform every engagement.
A Resource for Professionals
Trust and fiduciary accounting questions often arise in the offices of estate planning attorneys, financial advisors, and CPAs. When a client steps into a trustee role, the accounting responsibilities often exceed what was anticipated at the drafting stage, creating the need for a technical partner who understands both the accounting and legal dimensions of trusts.
Fiscal Highlands serves as a skilled partner and resource for professionals whose clients require fiduciary reporting support.
Fiscal Highlands is the ideal partner for professional advisors whose clients require:
Technical fiduciary accounting beyond routine bookkeeping
Neutral document-supported analysis to prevent or resolve disputes
A professional to serve alongside a family member
Because Fiscal Highlands operates alongside Old Colony Law, the accounting work reflects a deep understanding of trust instruments and how trust disputes typically develop.
Types of Trusts Served
Services are provided for all types of trusts, the most common being:
Revocable and irrevocable trusts
Marital and credit shelter trusts
Special needs trusts
Charitable trusts
Family trusts
Trust administration requires discipline, accuracy, and transparency.
Fiscal Highlands provides structured fiduciary accounting support so that trustees can fulfill their duties with confidence.
Clarity in the Midst of Complexity
Serving as a trustee can feel overwhelming; legal obligations, beneficiary expectations, and fiduciary accounting rules all converge at once. Even well-intentioned family trustees can find themselves uncertain about proper allocations, recordkeeping, distributions or reporting.
Whether you are navigating a challenging transition, managing incomplete records, or simply trying to get ahead of potential disputes, Fiscal Highlands provides expertise needed to administer trusts with confidence. With guidance grounded in both law and accounting, trustees can act decisively, ensure transparency for all beneficiaries and perhaps most importantly, reduce unnecessary risk.
Understanding the Duty to Account
A trust accounting is more than a summary of transactions. It is a formal report detailing:
Assets on hand
Receipts and disbursements
Allocations between income and principal
Distributions to beneficiaries
Unlike standard financial statements, trust accountings are governed by the trust document and applicable state law. The purpose is not profit measurement; it is transparency, accountability, and legal compliance.
Even well-intentioned trustees can encounter problems if records are incomplete, allocations are mishandled, or communication with beneficiaries breaks down. A properly prepared accounting reduces misunderstandings and protects trustees from legal and family conflicts.
Support for Family Trustees
For many individuals, being named trustee is the first time they have encountered fiduciary accounting. The learning curve can be steep.
Orientation on fiduciary duties and reporting obligations
Structured, ongoing recordkeeping and transaction tracking
Principal and income allocation analysis in accordance with the trust and governing laws
Periodic or court-format accountings
Reconstruction of incomplete records
Assistance during trustee transitions
The objective is not simply to produce reports, but to establish defensible administration practices, reduce risk, and promote clarity within families. Trustees gain confidence knowing their actions are grounded in both legal and accounting best practices.
┃YOUR TRUSTED PARTNER┃
Ben Palkowski, a dual-licensed attorney and CPA, established Fiscal Highlands to sit at the intersection of law and accounting, where things tend to get lost in translation. Trust accounting defies conventional accounting rules, and trust documents themselves can create rules of their own. As a co-owner of Old Colony Law, Ben serves as legal counsel to trustees and beneficiaries to establish trusts of their own.
“Attorneys and accountants speak different languages. In trust accounting, it is helpful to understand both sides.”
– Ben Palkowski, Attorney, CPA
THE FISCAL HIGHLANDS APPROACH
Fiscal Highlands takes a high-touch approach to trust and fiduciary accounting. From reviewing existing trust and accounting records to implementing disciplined reporting and allocation practices, the goal is to ensure that trust administration is accurate, transparent, and defensible. Fiscal Highlands helps trustees fulfill their fiduciary duties with confidence while maintaining clear communication with beneficiaries.
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The first step is to have an initial consultation, during which we will want to hear about your issue or question, review trust documents, and identify priorities.
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Some engagements are designed to resolve a one-off issue or question. Others are long-term projects or those that require ongoing attention.
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All trust and fiduciary accounting engagements are handled by Ben Palkowski, Attorney, CPA, who is also a trust drafting and administration attorney at Old Colony Law.
COMMON QUESTIONS
Understanding that every client’s needs vary and questions often arise even after reviewing our services, below are some common inquiries. We also welcome direct conversations to explore your specific situation. If you have additional questions or would like guidance tailored to your needs, please don’t hesitate to reach out for a confidential consultation.
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The term “fiduciary accounting” refers to how a fiduciary accounts for assets that are being managed on behalf of another. The term “trust accounting” is a subset of fiduciary accounting, where a trustee is managing assets on behalf of beneficiaries.
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Yes, a trust can be named as a beneficiary of an IRA, 401(k), 403(b) or other qualified retirement account or annuity. The trust must typically be named as a beneficiary on the account’s beneficiary designation form. The terms of the trust would, in turn, govern the disposition and accounting of the funds that are then distributed from the account to the trust.
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It is important for trustees to understand the distinction between income and principal because different beneficiaries may be entitled to those different portions. For example, a trust may provide that a spouse receives distributions of trust income for the spouse’s life, and that children receive the principal after the spouse’s death. Accordingly, income and principal must be accounted for separately.
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The Uniform Principal and Income Act (UPAIA) provides guidelines and rules for determining what portion of accounting transactions are assigned to income and what is assigned to principal. While these are general guidelines, state law and the specific terms of a given trust document will govern trust accounting.
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A trustee must keep accurate, transparent financial records and provide beneficiaries with clear documentation showing all income, expenses and distributions. Even when a trustee has broad discretion, the must act in good faith and be able to justify decisions through proper documentation. Fiduciary accounting ensures accountability ad allows beneficiaries and courts to detect misuse or abuse of trust assets.
