Why You Cannot Demand an Accounting of a Revocable Trust: The Babbitt Case

Imagine a parent sets up a living trust, naming themselves as both the person who runs the trust (the settlor) and the person who manages it (the trustee). Years later, after that parent passes away, an adult child with a future interest in the trust steps forward.

The child wants to look at every financial transaction, bank statement, and asset transfer from the past several years—long before the parent died.

Can a remainder beneficiary demand an accounting for the time when a trust was completely revocable? A 2016 California court case called Babbitt v. Superior Court answers with a definitive no.

What Happened in the Babbitt Case?

Mary Lynne Babbitt and her husband, Leland, created a family trust and named themselves as the co-trustees. Under the rules of their trust, while they were both alive, they kept the power to change or revoke it at any time.

Leland passed away. After his death, the trust split into two parts: a survivor's trust that Mary could still change, and a decedent's trust that became permanent and irrevocable. Leland's daughter from a previous marriage, McCormack, was named as a 50 percent remainder beneficiary of both parts.

McCormack demanded a full accounting of all trust assets and activities stretching back several years before her father even died. Mary objected, arguing she did not have to provide financial records for the time period when the trust was fully revocable by her and her husband.

The lower court ordered Mary to provide the pre-death accounting anyway. Mary took the matter to the Court of Appeal via a writ of mandate to stop the order.

What Did the Court Decide?

The California Court of Appeal granted Mary's petition and blocked the accounting order.

The court drew a bright line based on how revocable trusts work:

• Revocable trusts belong to the settlor: While a trust is revocable, the person who created it has total freedom to spend, move, or change the assets however they want. The assets essentially belong to them, and their choices are not subject to approval by future beneficiaries.

• No fiduciary duty to beneficiaries beforehand: Trustees of a revocable trust owe their duties solely to the settlor while the settlor is alive. Because the settlors and the trustees were the same people in this case (Babbitt), they did not owe a duty to report to future beneficiaries.

• The rule changes after death: Once a settlor dies and a trust becomes irrevocable, beneficiaries gain standing to ask questions and demand reports moving forward. However, that right does not stretch backward into the period when the trust was revocable—unless there is a proven claim that the deceased settlor was incompetent, incapacitated, or subjected to undue influence before death.

Because McCormack did not claim that Leland was incompetent or tricked while he was alive, she had no legal right to pry into financial records from the period when the trust was still revocable.

The Big Lesson

When a trust is revocable and the people running it are the ones who created it, future beneficiaries have to wait. The law respects a living person's absolute autonomy over their own property and privacy until a trust officially becomes irrevocable upon death.