Annual Trust Accounting and Trustee's Report to Qualified Beneficiaries

ANNUAL TRUST ACCOUNTING

Trustee's Report to Qualified Beneficiaries

Commonwealth of Massachusetts — Pursuant to M.G.L. c. 203E, § 813(c)

THIS ANNUAL TRUST ACCOUNTING AND TRUSTEE'S REPORT is furnished as of [__/__/____] by the undersigned Trustee to each qualified beneficiary identified below, pursuant to Section 813(c) of the Massachusetts Uniform Trust Code, M.G.L. c. 203E.

SECTION 1 — TRUST IDENTIFICATION

SECTION 2 — ACCOUNTING PERIOD

SECTION 3 — TRUSTEE(S) AND PROFESSIONAL AGENTS

3.1 Trustee(s)

3.2 Professional Agents Engaged by the Trustee

SECTION 4 — QUALIFIED BENEFICIARIES RECEIVING THIS REPORT

SECTION 5 — SCHEDULE A: TRUST ASSETS — CARRYING VALUE AND FAIR MARKET VALUE

Pursuant to M.G.L. c. 203E, § 813(c), the trust property held as of the close of the accounting period is as follows:

Asset Categories Included (check all):

☐ Cash and cash equivalents
☐ Marketable securities (publicly traded equities, bonds, mutual funds, ETFs)
☐ Closely held business interests
☐ Real estate
☐ Tangible personal property
☐ Promissory notes receivable
☐ Life insurance policies
☐ Retirement accounts (where held in trust)
☐ Digital assets
☐ Other: [________________________________]

SECTION 6 — SCHEDULE B: LIABILITIES OF THE TRUST

Net Trust Value (Assets minus Liabilities): $[____________]

SECTION 7 — SCHEDULE C: RECEIPTS DURING ACCOUNTING PERIOD

Receipt Categories Include:

☐ Interest income
☐ Dividend income
☐ Rental income
☐ Capital gains realized on sale of trust assets
☐ Distributions from underlying entities (partnerships, LLCs, S corporations)
☐ Refunds and reimbursements
☐ Settlement proceeds
☐ Other: [________________________________]

SECTION 8 — SCHEDULE D: DISBURSEMENTS DURING ACCOUNTING PERIOD

Disbursement Categories Include:

☐ Administrative expenses (custodial, recordkeeping)
☐ Investment management fees
☐ Tax preparation and accounting fees
☐ Legal fees
☐ Insurance premiums
☐ Property maintenance and real estate expenses
☐ Federal and state income taxes paid by the trust
☐ Other: [________________________________]

SECTION 9 — SCHEDULE E: DISTRIBUTIONS TO BENEFICIARIES

SECTION 10 — SCHEDULE F: TRUSTEE COMPENSATION

Pursuant to M.G.L. c. 203E, § 813(c), the source and amount of trustee compensation paid during the accounting period is:

SECTION 11 — SECTION 1005 LIMITATIONS NOTICE (ADEQUATE DISCLOSURE)

NOTICE OF LIMITATION OF ACTIONS UNDER M.G.L. c. 203E, § 1005

YOU ARE HEREBY NOTIFIED that this Trustee's Report is intended to constitute a report that adequately discloses the existence of any potential claim for breach of trust arising from the matters disclosed herein, for purposes of starting the limitations period under M.G.L. c. 203E, § 1005.

11.1 Adequate Disclosure. The schedules, narrative descriptions, transactions, valuations, and other information set forth in Sections 5 through 10 above are intended to provide adequate disclosure of all material facts relating to the administration of the trust during the accounting period.

11.2 Time Within Which Proceedings Must Be Commenced. Pursuant to M.G.L. c. 203E, § 1005:

• Any judicial proceeding by a beneficiary against the Trustee for breach of trust based upon matters adequately disclosed in this Report must be commenced within the period specified in M.G.L. c. 203E, § 1005, measured from the date this Report is sent to the beneficiary.
• Where § 1005(a) and (b) do not apply, a judicial proceeding by a beneficiary against a Trustee for breach of trust must in any event be commenced within FIVE (5) YEARS after the first to occur of: (1) the removal, resignation, or death of the Trustee; (2) the termination of the beneficiary's interest in the trust; or (3) the termination of the trust. M.G.L. c. 203E, § 1005(c).

11.3 Right to Inspect. You have the right to request and inspect underlying books, records, statements, vouchers, and other documents supporting this Report. M.G.L. c. 203E, § 813(a). Requests should be directed to the Trustee at the address in Section 3 above.

11.4 Right to Object. You have the right to object to this Report by:

• Submitting a written objection to the Trustee identifying the specific item objected to and the basis of the objection within [____] days of your receipt of this Report (the Trustee requests, but is not statutorily entitled to, an objection period of 30–60 days for informal resolution); and/or
• Commencing a judicial proceeding in the Probate and Family Court Department of the Trial Court of the Commonwealth of Massachusetts pursuant to M.G.L. c. 215, § 6 and M.G.L. c. 203E, § 203 (including a petition for allowance of account under MPC 857 or a complaint under c. 215, § 6, governed by Supplemental Probate & Family Court Rules 72 and 72A).

11.5 Effect of Failure to Object. Failure to commence a judicial proceeding within the applicable § 1005 limitations period may bar your claim, even if the matter would otherwise constitute a breach of trust. THIS IS A LEGAL NOTICE OF LIMITATIONS. You are encouraged to consult independent counsel of your choosing.

SECTION 12 — RECEIPT, RELEASE, AND APPROVAL (OPTIONAL)

The undersigned qualified beneficiary, having reviewed the foregoing Trustee's Report and having had the opportunity to inspect the underlying books and records of the trust, hereby:

☐ APPROVES the Report and all transactions reflected therein;

☐ RELEASES AND DISCHARGES the Trustee from any and all claims for breach of trust arising out of the matters disclosed in the Report, to the extent permitted by M.G.L. c. 203E, § 1009 and consistent with M.G.L. c. 203E, § 1008;

☐ RATIFIES all acts of the Trustee disclosed in the Report; and

☐ ACKNOWLEDGES that this Receipt and Release is given voluntarily, after full opportunity to review the underlying books and records of the trust and after notice of the right to consult independent counsel.

SECTION 13 — TRUSTEE VERIFICATION

The undersigned Trustee, being duly cautioned, hereby certifies and verifies under the pains and penalties of perjury that:

1. The undersigned has prepared (or caused to be prepared) the foregoing Annual Trust Accounting and Trustee's Report.
2. The schedules, transactions, valuations, and disclosures set forth herein are true, accurate, and complete to the best of the Trustee's knowledge, information, and belief.
3. All trust property has been administered in accordance with the terms of the trust and the Trustee's fiduciary duties under M.G.L. c. 203E.
4. This Report is furnished to the qualified beneficiaries identified in Section 4 in satisfaction of the Trustee's duty under M.G.L. c. 203E, § 813(c).

SECTION 14 — CERTIFICATE OF SERVICE

I, the undersigned, hereby certify that on [__/__/____], I served a true and accurate copy of this Annual Trust Accounting and Trustee's Report upon each qualified beneficiary identified in Section 4 above, by the following method(s):

☐ First-class mail, postage prepaid, addressed to each beneficiary at the address shown in Section 4
☐ Certified mail, return receipt requested, tracking number(s): [________________________________]
☐ Personal delivery
☐ Email to the beneficiary's email address of record (where permitted by the trust or with the beneficiary's written consent)
☐ Service upon a representative under M.G.L. c. 203E, §§ 301–305

SECTION 15 — OPTIONAL JUDICIAL ALLOWANCE

☐ Trustee elects NOT to seek judicial allowance of this Account at this time and relies on the limitations notice in Section 11.

☐ Trustee elects to seek judicial allowance of this Account by filing:

• ☐ Petition for Allowance of Account (MPC 857) and Trust Account (MPC 859) in the Probate and Family Court Department, [________________________________] County
• ☐ Complaint under M.G.L. c. 215, § 6 in the Probate and Family Court Department, [________________________________] County

Sources and References

• M.G.L. c. 203E, § 813 (Duty to Inform and Report) — https://www.mass.gov/info-details/mass-general-laws-c203e-ss-813
• M.G.L. c. 203E, § 1005 (Limitation of Action Against Trustee) — https://www.mass.gov/info-details/mass-general-laws-c203e-ss-1005
• M.G.L. c. 203E, § 1008 (Exculpation of Trustee — Limits)
• M.G.L. c. 203E, § 1009 (Beneficiary Consent, Release, or Ratification)
• M.G.L. c. 203E, § 105 (Default and Mandatory Rules)
• M.G.L. c. 206 (Accounts of Fiduciaries)
• M.G.L. c. 215, § 6 (Probate and Family Court Equity Jurisdiction)
• Supplemental Rules of the Probate and Family Court, Rules 72 and 72A
• Probate and Family Court Uniform Practices XVIA and XVII
• Briggs v. Crowley, 352 Mass. 194 (1967)
• Matter of the Colecchia Family Irrevocable Trust, 100 Mass. App. Ct. 504 (2021)
• Schwalm v. Schwalm, Mass. App. Ct. No. 22-P-783 (2023)
• MPC Forms 857 (Petition for Allowance of Account) and 859 (Trust Account)

END OF ANNUAL TRUST ACCOUNTING AND TRUSTEE'S REPORT