Calling all trustees: registration requirements have changed.

• Author: Allen, Bruce C.
• Position: Government relations - NonProfit Integrity Act of 2004

Many CPAs act as private trustees for specific clients. Legislation effective in 2004 required those acting as the trustee for six or more families or individuals to register with the California Department of Justice by Jan. 1, 2005. New legislation, SB 1248 (Bowen), signed by the governor in September, lowered that number to those acting as trustees for four or more families and/or individuals.

The number of trust beneficiaries does not count for the purposes of calculating if a trustee falls within this exclusion. Once registered with the attorney general, the registration must be renewed every three years. The attorney general is allowed to charge a reasonable fee for the registration. The fee is $385 for three years.

The process can be initiated online at www.ag.ca.gov. Registering trustees are required to report the aggregate amount of funds under supervision and the names of the trusts. Registration requires that college transcripts be submitted for any degree claimed in the application.

[ILLUSTRATION OMITTED]

Failure to register before Jan. 1, 2005 could constitute cause for removal. The registration requirement does not apply when the person is related to the trustor by blood, marriage, adoption or registered domestic partnership. Trust companies and FDIC insured institutions, their holding companies, subsidiaries or affiliates also are exempted. For a copy of the new law, visit www.leginfo.ca.gov/bilinfo.html.

Related legislation, AB 1155, requires the California Judicial Council to develop mandatory continuing education requirements for conservators and guardians by Jan. 1, 2006.

NonProfit Integrity Act of 2004 Signed Into Law

Gov. Schwarzenegger signed SB 1262 (Sher) Sept. 30, which was sponsored by the California Attorney General. It impacts all California charitable organizations and those out of state or foreign organizations that conduct activities or hold property in California. The new law makes significant changes in the way these organizations are governed and how funds are raised.

The new law takes effect Jan. 1, 2005 and affects charitable corporations, unincorporated associations and charitable trusts that are required to file reports with the attorney general. Exempt from the new law are educational institutions, hospitals, cemeteries and religious organizations.

Charities with gross revenue of $2 million or more in a year are required to have an annual audit. Grant or contract income from the government is not...