Annual Trust Accounting and Trustee's Report - Maryland

ANNUAL TRUST ACCOUNTING AND TRUSTEE'S REPORT

(Pursuant to Maryland Code, Estates and Trusts Article § 14.5-813(c))

1. TRUST IDENTIFICATION AND ACCOUNTING PERIOD

2. STATUTORY LIMITATION NOTICE — § 14.5-904 (READ CAREFULLY)

IMPORTANT — TIME LIMIT FOR OBJECTION OR CLAIM

Pursuant to Md. Code Ann., Est. & Trusts § 14.5-904, a beneficiary may not bring a judicial action against the Trustee for breach of trust more than ONE (1) YEAR after the date the beneficiary or the beneficiary's representative is sent a report that adequately discloses the existence of a potential claim and informs the recipient of the time allowed for bringing the action.

A report "adequately discloses" a potential claim if it provides sufficient information so the beneficiary or representative knows of the potential claim or should have inquired into its existence.

This Notice informs you of the time allowed for bringing a judicial action under § 14.5-904. The one-year period applies only if this Report adequately discloses the potential claim within the meaning of that section.

Exception: Section 14.5-904(c) does not limit the time for bringing an action for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries. Section 14.5-904 contains no separate five-year residual period.

3. SCHEDULE A — STATEMENT OF ASSETS ON HAND (BEGINNING OF PERIOD)

4. SCHEDULE B — LIABILITIES OF THE TRUST

5. SCHEDULE C — RECEIPTS DURING ACCOUNTING PERIOD

6. SCHEDULE D — DISBURSEMENTS DURING ACCOUNTING PERIOD

7. SCHEDULE E — DISTRIBUTIONS TO BENEFICIARIES

8. SCHEDULE F — TRUSTEE COMPENSATION (§ 14.5-813(c)(1))

9. SCHEDULE G — AGENT, ADVISOR, AND PROFESSIONAL COMPENSATION

10. SCHEDULE H — ASSETS ON HAND (END OF PERIOD) WITH MARKET VALUES

11. SCHEDULE I — RECONCILIATION

12. MARYLAND STATE-ONLY QTIP DISCLOSURE (If Applicable)

☐ This Trust holds property subject to a Maryland state-only QTIP election under Md. Code Ann., Tax-Gen. § 7-309(b)(7), decoupled from any federal QTIP election made (or not made) under I.R.C. § 2056(b)(7).

13. BENEFICIARY OBJECTION MECHANISM

If you object to any item disclosed in this Report, you may:

1. Informal resolution. Submit a written objection to the Trustee at the address listed in Section 1 within [____] days of the date this Report was sent. The Trustee will respond in writing within a reasonable time and will attempt to resolve the matter informally.

2. Nonjudicial settlement agreement. The parties may resolve the matter by a nonjudicial settlement agreement under Md. Code Ann., Est. & Trusts § 14.5-111, provided the agreement does not violate a material purpose of the Trust and includes terms a court could properly approve.

3. Judicial petition. Commence a proceeding in the Circuit Court for [____________] County, Maryland (the county where trust administration is principally carried on) under Md. Code Ann., Est. & Trusts § 14.5-201, on or before the one-year deadline stated in Section 2 of this Report. Available relief includes an accounting, surcharge, removal of the trustee, and other equitable remedies.

14. RECEIPT, RELEASE, AND REFUNDING (§ 14.5-907)

A copy of a proposed Receipt, Release, and Refunding Agreement accompanies this Report. Consent, release, or ratification is governed by § 14.5-907. Under subsection (b), it does not protect a Trustee if the beneficiary's consent, release, or ratification was induced by the Trustee's improper conduct or if the beneficiary lacked knowledge of the beneficiary's rights or the material facts relating to the breach. Any separate deemed-release procedure must track § 14.5-907(c) through (f), including its report, mailing, notice, and 120-day requirements.

15. TRUSTEE VERIFICATION

I, the undersigned Trustee, solemnly affirm under the penalties of perjury and upon personal knowledge that:

1. I am the duly acting Trustee of the Trust identified above;
2. The foregoing accounting is a true, complete, and accurate report of the trust property, liabilities, receipts, disbursements, distributions, and compensation for the accounting period stated, prepared in accordance with Md. Code Ann., Est. & Trusts § 14.5-813(c);
3. Fair market values stated are based on the sources identified or, where unavailable, on reasonable methods identified herein;
4. I have not knowingly omitted any material transaction or interest; and
5. This Report is being sent to each qualified beneficiary entitled to receive it.

16. NOTARY ACKNOWLEDGMENT

STATE OF MARYLAND

COUNTY OF [____________], to wit:

On this [____] day of [____________], 20[__], before me, the undersigned notary public, personally appeared [________________________________], who is personally known to me or who has produced satisfactory identification, and who acknowledged that he/she/they executed the foregoing Annual Trust Accounting and Trustee's Report as Trustee of the above-named Trust for the purposes therein stated, and made oath in due form of law that the matters and facts set forth therein are true and correct to the best of his/her/their knowledge, information, and belief.

17. CERTIFICATE OF SERVICE

I, [________________________________], certify that on [__/__/____], I caused a true and correct copy of this Annual Trust Accounting and Trustee's Report (together with the proposed Receipt, Release, and Refunding Agreement) to be sent to each qualified beneficiary entitled to receive it, as follows:

SOURCES AND REFERENCES

• Md. Code Ann., Est. & Trusts § 14.5-813(c) (Trustee's report — content and timing)
• Md. Code Ann., Est. & Trusts § 14.5-904 (Limitation on actions against trustee — 1-year report rule; no limit for bad-faith or reckless-indifference breach)
• Md. Code Ann., Est. & Trusts § 14.5-906 (Exculpation of trustee — bad faith, reckless indifference, and unreasonableness limits)
• Md. Code Ann., Est. & Trusts § 14.5-907 (Beneficiary's consent, release, or ratification)
• Md. Code Ann., Est. & Trusts § 14.5-111 (Nonjudicial settlement agreements)
• Md. Code Ann., Est. & Trusts § 14.5-201 (Court jurisdiction over trust administration — equity superintending power)
• Md. Code Ann., Est. & Trusts § 14.5-105 (Mandatory provisions)
• Md. Code Ann., Tax-Gen. § 7-309(b)(7) (Maryland state-only QTIP election)
• D'Aoust v. Diamond, 424 Md. 549 (2012) (strict standard for Maryland trustees)
• McGuireWoods, "Maryland Enacts New Statute of Limitations for Breach-of-Trust Actions" (Oct. 15, 2018)