Accounting for the Reserve for Depreciation: Estates and Trusts
By Robert J. Suhajda1
When an estate or trust contains assets that lose their value due to wear, tear, decay, corrosion, or gradual obsolescence, it is important for practitioners, who include estate planners, lawyers, accountants, and professional trustees to address the issue before drafting the governing documents in order to capture the testator’s or trustor’s intent regarding changes in the valuation of principal assets.
II. CALIFORNIA PROBATE CODE SECTION 16372, THE RESERVE FOR DEPRECIATION