Annual Trust Accounting (New Jersey)

ANNUAL TRUSTEE'S REPORT AND ACCOUNTING

Discretionary report under N.J.S.A. 3B:31-67(c); intended limitation notice under N.J.S.A. 3B:31-74(a) only if all statutory conditions are satisfied

N.J.S.A. 3B:31-67 does not require an annual report. Subsection (c) permits a trustee seeking the protection of N.J.S.A. 3B:31-74 to provide a report containing the categories used in this form. Confirm separately whether the trust instrument, a court order, settlement, or another authority requires periodic accounting.

1. TRUST IDENTIFICATION

2. ACCOUNTING PERIOD

3. QUALIFIED BENEFICIARIES TO WHOM REPORT IS DELIVERED

4. SUMMARY OF ACCOUNTING

5. SCHEDULE A — BEGINNING TRUST PROPERTY

Statement of trust property held at the start of the accounting period. N.J.S.A. 3B:31-67(c) identifies a listing of trust assets and, if feasible, their market values as contents of a discretionary report.

6. SCHEDULE B — ENDING TRUST PROPERTY

Statement of all trust property held at the close of the accounting period.

7. SCHEDULE B-1 — TRUST LIABILITIES

Statement of trust liabilities included in the discretionary report described by N.J.S.A. 3B:31-67(c).

8. SCHEDULE C — RECEIPTS

All receipts of income and principal during the accounting period, with source identification.

9. SCHEDULE D — DISBURSEMENTS

All disbursements of income and principal during the accounting period (excluding distributions to beneficiaries, which are on Schedule E, and trustee/agent compensation, on Schedule G).

10. SCHEDULE E — DISTRIBUTIONS TO BENEFICIARIES

11. SCHEDULE F — CHANGES IN INVESTED ASSETS

Realized gains and losses on sales of trust assets, and other adjustments to invested principal.

12. SCHEDULE G — TRUSTEE COMPENSATION

Source and amount of trustee compensation included in the discretionary report described by N.J.S.A. 3B:31-67(c).

13. SCHEDULE G-1 — AGENT, ATTORNEY, AND PROFESSIONAL COMPENSATION

14. SCHEDULE H — TRUSTEE DECISIONS AND MATERIAL TRANSACTIONS

15. LIMITATION NOTICE UNDER N.J.S.A. 3B:31-74

IMPORTANT — TIME LIMIT FOR OBJECTIONS AND BREACH-OF-TRUST CLAIMS

Pursuant to N.J.S.A. 3B:31-74(a) of the New Jersey Uniform Trust Code, a beneficiary may not commence a proceeding against a trustee for breach of trust more than SIX (6) MONTHS after the date the beneficiary or a representative of the beneficiary was sent a report that adequately disclosed the existence of a potential claim for breach of trust and informed the beneficiary of the time allowed for commencing a proceeding.

YOU ARE HEREBY NOTIFIED that this Trustee's Report and Accounting is intended to constitute such a report. If you believe that any act or omission of the trustee disclosed in, or reasonably ascertainable from, this report constitutes a breach of trust, you must commence any proceeding against the trustee within SIX (6) MONTHS of the date this report was sent to you. Failure to do so may bar your claim under N.J.S.A. 3B:31-74(a).

Date this Report Was Sent: [__/__/____]
Deadline to Commence Proceeding for Adequately Disclosed Claims: [__/__/____] (six months from the date sent)

If a potential claim for breach of trust is not adequately disclosed in this report, the residual limitation period of N.J.S.A. 3B:31-74(b) (four years from the earliest of (i) termination of your interest in the trust, (ii) termination of the trustee's service, or (iii) termination of the trust) shall apply.

16. BENEFICIARY OBJECTION PROCEDURE

Any beneficiary who objects to any item, computation, or transaction shown in this report may:

(a) Informal Objection. Deliver a written objection to the trustee at the address in Section 1 within sixty (60) days of receipt, identifying the specific item objected to and the basis of the objection. The trustee will respond within thirty (30) days.

(b) Formal Court Action. Commence a proceeding in the Superior Court of New Jersey, Chancery Division, Probate Part, in the county of the trust's principal place of administration, under Rule 4:87 (Actions for the Settlement of Accounts), seeking judicial settlement of the account, exceptions to the account, surcharge of the trustee, or related relief.

(c) Time Limits. All proceedings must be commenced within the limitations periods set forth in N.J.S.A. 3B:31-74, including, where applicable, the six-month limitation in subsection (a) and the four-year residual limitation in subsection (b).

17. RECEIPT, RELEASE, AND RATIFICATION (OPTIONAL)

The undersigned beneficiary, having reviewed the foregoing Annual Trustee's Report and Accounting for the accounting period [__/__/____] through [__/__/____], hereby:

1. APPROVES the report and accounting in all respects;
2. RECEIPTS for all distributions reflected on Schedule E;
3. RATIFIES and CONFIRMS all acts and omissions of the trustee adequately disclosed therein; and
4. RELEASES the trustee from any and all claims arising from matters adequately disclosed in this report, to the extent permitted by N.J.S.A. 3B:31-77 and 3B:31-78.

This release does not extend to (a) matters not adequately disclosed in this report, (b) breaches committed in bad faith or with reckless indifference, or (c) any conduct described in N.J.S.A. 3B:31-77 that may not be released.

18. TRUSTEE VERIFICATION

I, [____________________________], the trustee of the trust identified above, declare under penalty of perjury under the laws of the State of New Jersey that:

1. I have caused this Annual Trustee's Report and Accounting to be prepared from the books and records of the trust maintained pursuant to N.J.S.A. 3B:31-63;
2. The information contained in this report, including all schedules, is true, correct, and complete to the best of my knowledge, information, and belief;
3. All material decisions, transactions, and matters affecting the interests of the qualified beneficiaries have been disclosed in this report;
4. I have served this report on each qualified beneficiary as listed in Section 3 on the date set forth therein.

19. NOTARY ACKNOWLEDGEMENT

STATE OF NEW JERSEY
COUNTY OF [________________]

On this [____] day of [______________], 20[____], before me, the undersigned notary public, personally appeared [TRUSTEE NAME], who is personally known to me or who provided satisfactory evidence of identification, and who, being duly sworn, acknowledged that he/she executed and verified the foregoing Annual Trustee's Report and Accounting in the capacity of Trustee for the purposes therein contained.

[Notary Seal]

20. CERTIFICATE OF SERVICE

I, [____________________________], certify that on [__/__/____], I served a true and correct copy of the foregoing Annual Trustee's Report and Accounting, including all schedules and the Limitation Notice under N.J.S.A. 3B:31-74, on each qualified beneficiary identified in Section 3, by the method indicated therein. Certified mail receipts and electronic delivery confirmations are retained in the trust file.

SOURCES AND REFERENCES

• New Jersey Revised Statutes, Title 3B, Chapter 31 (New Jersey Uniform Trust Code), N.J.S.A. 3B:31-1 to 3B:31-84.
• N.J.S.A. 3B:31-67 (Duty to Disclose and Discretion to Periodically Report; current official text) — https://lis.njleg.state.nj.us/nxt/gateway.dll?xhitlist_vq=3B%3A31-67+Duty+to+disclose+and+discretion+to+periodically+report.&f=xhitlist&xhitlist_q=%5BRank+100%5D%5BDomain%3A+3B%3A31-67+Duty+to+disclose+and+discretion+to+periodically+report.%5D3B%3A31-67+Duty+to+disclose+and+discretion+to+periodically+report.&xhitlist_x=advanced&xhitlist_s=relevance-weight&xhitlist_mh=99999&xhitlist_d=&xhitlist_hc=%5BXML%5D%5BKwic%2C1000%5D&xhitlist_xsl=xhitlist.xsl&xhitlist_vpc=first&xhitlist_vps=20&xhitlist_sel=title%3Bpath%3Brelevance-weight%3Bcontent-type%3Bhome-title%3Bitem-bookmark%3Btitle-path%3Bhit-context&vid=Publish:10.1048/Enu
• N.J.S.A. 3B:31-74 (Limitation of action against trustee — 6-month and 4-year periods).
• N.J.S.A. 3B:31-77 (Exculpation of trustee — limits on bad-faith / reckless conduct).
• N.J.S.A. 3B:31-78 (Beneficiary's consent, release, or ratification).
• N.J.S.A. 3B:31-63 (Recordkeeping and identification of trust property).
• N.J.S.A. 3B:18-23 et seq. (Trustee commissions on corpus and income).
• N.J.S.A. 3B:17-1 et seq. (Accountings of fiduciaries — general).
• New Jersey Court Rules, R. 4:87 (Actions for the Settlement of Accounts — Superior Court, Chancery Division, Probate Part).
• P.L. 2015, c. 276 (NJ UTC enacted; effective July 17, 2016).
• In re Koretzky's Estate, 8 N.J. 506 (1951) (formal accounting and beneficiary protections).
• Saccone v. Bd. of Trs. of Police & Firemen's Retirement Sys., 219 N.J. 369 (2014).
• New Jersey State Bar Association, Real Property, Trust & Estate Law Section, commentary on the NJ UTC's 6-month limitation period as a modification of UTC § 1005(a)'s 1-year default.