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Fiduciary accounting is the formal record a trustee or executor keeps of every receipt and disbursement, split between principal and income. It’s your legal duty to account, and it’s your protection if a beneficiary challenges you.
Fiduciary Accounting — Statement
Principal
the assets themselves
Income
what they earn
The short version
What it is
Fiduciary accounting is the formal record a trustee or executor keeps, showing every receipt and disbursement and splitting them between principal and income.
Why it matters
It is what protects you as a fiduciary and what beneficiaries, and sometimes courts, can require. It is separate from the trust or estate’s income tax return.
How we help
Maris & Associates CPAs prepare fiduciary accountings and the related returns so you meet your duty cleanly.
We review your trust or estate records and tell you what the accounting needs. Confidential, handled by a CPA, not a call center.
Get help with a fiduciary accountingIt is a structured statement of everything that flowed through the trust or estate: assets received, income earned, expenses and distributions paid, and what remains. It is prepared for the beneficiaries, and for the court when an estate or a contested trust requires it. The rules for it come from state law.
The heart of a fiduciary accounting is the split between principal (the assets themselves) and income (what they earn). It matters because different beneficiaries are often entitled to each, and because the split affects how the trust or estate is taxed. State principal-and-income rules govern how each item is classified.
Principal
the assets themselves
Income
what they earn
A fiduciary accounting and the tax return are two different documents. The trust or estate also files Form 1041, the federal income tax return, which follows tax law rather than the state principal and income rules. We prepare both so they reconcile.
Follows state principal and income rules. Prepared for the beneficiaries — and the court when required.
The federal income tax return for the trust or estate. Follows tax law, not the principal and income rules.
As a trustee or executor, you have a legal duty to account, and beneficiaries can demand one. A clear, correct accounting is your best protection: it shows you handled the role properly and limits your exposure to claims.
Our process
Step 1: we gather the records: every asset, receipt, disbursement, and distribution for the trust or estate.
Step 2: we classify each item as principal or income under Washington’s principal and income rules.
Step 3: we produce the accounting in the format your beneficiaries or the Washington court expect.
Step 4: we reconcile it with the related estate and trust tax work and coordinate with the attorney handling the trust or estate.
“Many trustees are surprised to learn that filing a Form 1041 tax return isn’t enough to satisfy their legal duty to account. A proper fiduciary accounting protects you from beneficiary disputes by making a crystal-clear, legally compliant distinction between principal and income.”
“Very happy with the quick responses and knowledge given this year for the tax return. Been using this company for the past 12 years, a few staff changes and all, but overall very pleased.”
Cost depends on the size of the trust or estate, how clean the records are, and whether a court accounting is required. We quote it up front.
A proper fiduciary accounting discharges your duty to account and limits your exposure to beneficiary claims.
Tell us about the trust or estate and what stage you are at, and we will prepare the accounting and the returns and keep you covered.
Reviewed by Sara Stegall, JD. Tax Attorney at Maris & Associates CPAs, Everett, WA. Advises individuals and families on trust and estate taxation, entity structuring, and complex tax law research.
