Annual Trust Accounting and Report to Qualified Beneficiaries (Minnesota Trust Code, Minn. Stat. §§ 501C.0813, 501C.1005)

ANNUAL TRUST ACCOUNTING AND REPORT TO QUALIFIED BENEFICIARIES

Optional accounting prepared with reference to Minn. Stat. §§ 501C.0813 and 501C.1005

I. TRUST IDENTIFICATION

II. TRUSTEE IDENTIFICATION

III. RECIPIENT AND INFORMATION-DUTY GATE (§ 501C.0813)

Section 501C.0813(a) concerns qualified beneficiaries of an irrevocable
trust and requires reasonable information, not a categorical annual account.
Before identifying recipients, review the trust instrument and complete:

☐ The trust was irrevocable during the reporting period.

☐ No express trust term redirects or limits the paragraph (a) information
route under § 501C.0813(b), or the controlling term and informed person are:
[________________________________].

☐ Each waiver or withdrawal of waiver under § 501C.0813(c) has been
identified and retained with the trust records.

☐ Counsel determined the persons who should receive this optional account,
including any beneficiary representative, from the current trust terms and law.

IV. SUMMARY OF ACCOUNT

V. SCHEDULE OF RECEIPTS

A. Income Receipts

B. Principal Receipts

VI. SCHEDULE OF DISBURSEMENTS

A. Ordinary Administration Expenses

B. Distributions to Beneficiaries

C. Taxes Paid

VII. STARTING STATEMENT OF ASSETS (As of [__/__/____])

VIII. ENDING STATEMENT OF ASSETS AND MARKET VALUES (As of [__/__/____])

IX. STATEMENT OF LIABILITIES

☐ The Trust has no outstanding liabilities as of the end of the accounting period.

X. TRUSTEE COMPENSATION AND AGENTS HIRED

A. Trustee Compensation

B. Agents Hired by Trustee

C. Related-Party Transactions (§ 501C.0802 — Duty of Loyalty)

☐ The Trustee did not engage in any transactions during the accounting period with the Trustee personally, with any entity in which the Trustee holds a beneficial interest, or with any agent related to the Trustee, other than as fully disclosed above.

☐ The following related-party transactions occurred during the accounting period and are fully disclosed:

[____________________________________________________________]

[____________________________________________________________]

D. Decanting, Modification, or Nonjudicial Settlement Agreements

☐ No action under Minn. Stat. § 502.851 (decanting), §§ 501C.0410–0416 (modification/termination), or § 501C.0111 (nonjudicial settlement) occurred during the period.

☐ The following actions occurred and are described:

[____________________________________________________________]

XI. INVESTMENT POLICY AND PERFORMANCE (§ 501C.0901 et seq. — Minnesota Prudent Investor Act)

XII. OPTIONAL ADEQUATE-DISCLOSURE NOTICE — § 501C.1005

NOTICE ABOUT POTENTIAL CLAIMS AND LIMITATIONS

Minnesota Statutes § 501C.1005 provides a three-year period measured from
the date a beneficiary or representative was sent a report that adequately
disclosed the existence of a potential claim. A report is adequate only if
it gives enough information for the recipient to know of the potential claim
or to know that further inquiry should be made.

If that three-year rule does not apply, paragraph (c) provides a six-year
period after the first of the trustee's removal, resignation, or death; the
termination of the beneficiary's interest; or the termination of the trust.

This notice does not make the Account an adequately disclosing report. Each
potential claim must be described with enough facts for § 501C.1005(b), and
Minnesota counsel should determine which period applies. A recipient who may
have a claim should consult independent counsel promptly.

XIII. RIGHT TO PETITION THE DISTRICT COURT (PROBATE DIVISION)

You are notified that, as a qualified beneficiary, you may petition the Minnesota District Court (probate division) under Minn. Stat. § 501C.0202 to obtain court review of this Account and of the acts of the Trustee. Available proceedings include, without limitation:

• An order construing the trust or instructing the Trustee (§§ 501C.0201, 501C.0410–0417);
• An order reviewing, compelling, or settling a trustee's account or report (§ 501C.0813; § 501C.1004);
• An order removing or surcharging the Trustee for breach of trust (§§ 501C.0706, 501C.1001–1003);
• An order regarding representation of unborn, unascertained, minor, or incapacitated beneficiaries (§§ 501C.0301–0305).

A petition is filed in the district court of the county where the principal place of administration of the Trust is located (Minn. Stat. § 501C.0207). Notice of any such petition must comply with Minn. Stat. § 501C.0203.

XIV. OPTIONAL — BENEFICIARY RECEIPT, RELEASE, AND APPROVAL (§ 501C.1009)

I, the undersigned qualified beneficiary of the Trust, having received and had a reasonable opportunity to review the foregoing Annual Trust Accounting and Report for the accounting period [__/__/____] to [__/__/____], hereby:

☐ Approve the Account in all respects and ratify the acts of the Trustee during the period as fully disclosed in the Account;

☐ Release and discharge the Trustee from all claims, liabilities, and demands of any kind arising from any matter fully and adequately disclosed in the Account, to the maximum extent permitted by Minn. Stat. § 501C.1009;

☐ Acknowledge receipt of distributions reflected in Section VI(B) attributable to me;

☐ Acknowledge that I have been advised of my right to consult independent legal counsel before signing this Receipt and Release;

☐ Acknowledge that this approval is not effective to release the Trustee from liability for matters not adequately disclosed, for breach of trust committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries (§ 501C.1008), or where consent was induced by improper conduct of the Trustee (§ 501C.1009).

Executed on [__/__/____] at [____________________], [State].

Beneficiary Signature: [________________________________]

Print Name: [________________________________]

XV. BENEFICIARY OBJECTION MECHANISM

A qualified beneficiary who has questions or objections to any item in this Account is encouraged (but not required) to deliver a written objection to the Trustee within [____] days of receipt of this Account at the address in Section II. The objection should:

1. Identify the specific item(s) in the Account to which the beneficiary objects;
2. State the factual and legal basis of the objection;
3. State the relief requested (e.g., revised allocation, refund, surcharge).

An informal objection does not extend, shorten, or substitute for the statutory limitations periods stated in Section XII. Unresolved objections may be presented to the Minnesota District Court (probate division) under Minn. Stat. § 501C.0202 in the county of the Trust's principal place of administration (§ 501C.0207).

Trustee Contact for Objections / Inquiries:

XVI. TRUSTEE VERIFICATION AND SIGNATURE

I, the undersigned Trustee, declare under penalty of perjury under the laws of the State of Minnesota:

1. I have reviewed the foregoing Annual Trust Accounting and Report and each schedule attached;
2. The information set forth is true, correct, and complete to the best of my knowledge, based on the books, records, and supporting documentation of the Trust;
3. All material receipts, disbursements, assets, liabilities, market values, trustee compensation, and agents hired (including any related-party agents) for the accounting period stated above are adequately disclosed;
4. I have administered the Trust in good faith and in accordance with its terms and purposes and the interests of the qualified beneficiaries (Minn. Stat. § 501C.0801); and
5. This Accounting and Report is furnished [voluntarily / under the trust terms / to satisfy an information duty identified by counsel]. I understand that § 501C.0813 does not itself require a categorical annual account and that § 501C.1005(a) applies only to potential claims actually disclosed with the information required by paragraph (b).

Executed on [__/__/____] at [____________________], Minnesota.

Trustee Signature: [________________________________]

Print Name: [________________________________]

Capacity: [________________________________]

XVII. PROOF OF SERVICE

I, the undersigned, declare that I am over the age of 18 years and not a party to this matter. My business or residence address is set forth below. On [__/__/____], I served the foregoing ANNUAL TRUST ACCOUNTING AND REPORT on each qualified beneficiary identified in Section III, by placing a true copy in a sealed envelope addressed to each such beneficiary at the address set forth in Section III, with postage thereon fully prepaid, and depositing the envelope in the United States Mail at [____________________], Minnesota, OR by personal delivery or other authorized method as indicated.

I declare under penalty of perjury under the laws of the State of Minnesota that the foregoing is true and correct.

Date: [__/__/____]

Signature: [________________________________]

Print Name: [________________________________]

Address: [________________________________]

SOURCES AND REFERENCES

• Minn. Stat. § 501C.0103 (Definitions) — https://www.revisor.mn.gov/statutes/cite/501C.0103
• Minn. Stat. § 501C.0105 (Default and Mandatory Rules) — https://www.revisor.mn.gov/statutes/cite/501C.0105
• Minn. Stat. § 501C.0202 (Subject-Matter Jurisdiction) — https://www.revisor.mn.gov/statutes/cite/501C.0202
• Minn. Stat. § 501C.0207 (Venue) — https://www.revisor.mn.gov/statutes/cite/501C.0207
• Minn. Stat. § 501C.0801 (Duty to Administer Trust) — https://www.revisor.mn.gov/statutes/cite/501C.0801
• Minn. Stat. § 501C.0802 (Duty of Loyalty) — https://www.revisor.mn.gov/statutes/cite/501C.0802
• Minn. Stat. § 501C.0803 (Impartiality) — https://www.revisor.mn.gov/statutes/cite/501C.0803
• Minn. Stat. § 501C.0813 (Duty to Inform and Report) — https://www.revisor.mn.gov/statutes/cite/501C.0813
• Minn. Stat. § 501C.0901 et seq. (Prudent Investor Act) — https://www.revisor.mn.gov/statutes/cite/501C.0901
• Minn. Stat. § 501C.1004 (Attorney's Fees and Costs) — https://www.revisor.mn.gov/statutes/cite/501C.1004
• Minn. Stat. § 501C.1005 (Limitation of Action Against Trustee) — https://www.revisor.mn.gov/statutes/cite/501C.1005
• Minn. Stat. § 501C.1008 (Exculpation of Trustee) — https://www.revisor.mn.gov/statutes/cite/501C.1008
• Minn. Stat. § 501C.1009 (Beneficiary's Consent, Release, or Ratification) — https://www.revisor.mn.gov/statutes/cite/501C.1009
• Minn. Stat. § 502.851 (Trust Decanting) — https://www.revisor.mn.gov/statutes/cite/502.851