Annual Trust Accounting (Pennsylvania)

ANNUAL TRUST ACCOUNTING

(Pursuant to 20 Pa.C.S. §§ 7780.3(i)(5) and 7785)

Before you use this: This is a periodic financial report to beneficiaries. A nonjudicial account settlement under § 7785.1 requires its own notice, recipient list, account history and 60-day objection process.

COMMONWEALTH OF PENNSYLVANIA
COUNTY OF [________________________________]

I. TRUST AND TRUSTEE IDENTIFICATION

II. ACCOUNTING PERIOD

III. CONSPICUOUS STATUTORY NOTICE — 20 Pa.C.S. § 7785(a)(1)(iv)

IMPORTANT — NOTICE OF LIMITATION OF ACTIONS UNDER 20 PA.C.S. § 7785(a)

THIS REPORT IS A PERIODIC WRITTEN FINANCIAL REPORT WITHIN THE MEANING OF 20 PA.C.S. § 7785(a). UNDER PENNSYLVANIA LAW, A BENEFICIARY IS BARRED FROM CHALLENGING A TRANSACTION OR ASSERTING A CLAIM AGAINST THE TRUSTEE FOR BREACH OF TRUST IF (i) THE TRUSTEE PROVIDED THE BENEFICIARY AT LEAST ANNUALLY WITH PERIODIC WRITTEN FINANCIAL REPORTS CONCERNING THE TRUST; (ii) THE TRANSACTION WAS DISCLOSED IN ANY SUCH REPORT, OR SUCH REPORT PROVIDED SUFFICIENT INFORMATION SO THAT THE BENEFICIARY KNEW OR SHOULD HAVE KNOWN OF THE POTENTIAL CLAIM OR SHOULD HAVE INQUIRED INTO ITS EXISTENCE; (iii) IN THE THIRTY (30) MONTHS AFTER THE REPORT WAS SENT BY THE TRUSTEE THE BENEFICIARY DID NOT NOTIFY THE TRUSTEE IN WRITING OF A CHALLENGE TO THE TRANSACTION OR AN ASSERTION OF A CLAIM, AND DID NOT PROVIDE IN WRITING THE BASIS FOR THAT CHALLENGE OR ASSERTION; AND (iv) ALL REPORTS WERE ACCOMPANIED BY A CONSPICUOUS WRITTEN STATEMENT DESCRIBING THE EFFECT OF THIS PARAGRAPH.

YOU SHOULD READ THIS REPORT CAREFULLY. THE 30-MONTH BAR APPLIES ONLY WHEN ALL CONDITIONS IN SECTION 7785(a)(1) ARE SATISFIED, INCLUDING ADEQUATE DISCLOSURE OF THE TRANSACTION AND THE CONSPICUOUS STATEMENT. A WRITTEN CHALLENGE WITH ITS BASIS MAY PRESERVE THE CLAIM FROM THAT BAR, BUT SECTION 7785(b)(1.1) SEPARATELY LIMITS WHEN A PRESERVED CLAIM MAY BE COMMENCED IN COURT OR ARBITRATION. CONSULT COUNSEL PROMPTLY.

IV. SCHEDULE A — ASSETS AT BEGINNING OF ACCOUNTING PERIOD

V. SCHEDULE B — RECEIPTS (Principal and Income)

Classify each transaction under the Trust and applicable principal-and-income rules; the descriptions below are examples to replace with actual transactions.

B-1. Income Receipts

B-2. Principal Cash Inflows and External Additions

Record proceeds of an asset already shown in opening assets as an internal conversion of that asset to cash. Count only new property or cash from outside the Trust as an external addition in Section XI.

VI. SCHEDULE C — DISBURSEMENTS

C-1. Income Disbursements

C-2. Principal Disbursements

VII. SCHEDULE D — DISTRIBUTIONS TO BENEFICIARIES

VIII. SCHEDULE E — TRUSTEE COMPENSATION AND AGENT FEES

E-1. Trustee Compensation

E-2. Fees to Agents, Advisors, and Services Hired

IX. SCHEDULE F — LIABILITIES OF THE TRUST

X. SCHEDULE G — ASSETS AT END OF ACCOUNTING PERIOD

Net Trust Value (Ending FMV minus Liabilities): $[________________]

XI. RECONCILIATION SUMMARY

Do not add sale proceeds of opening assets a second time in this reconciliation; a sale changes an asset's form and any value difference belongs in the change-in-value line. Reconcile each schedule against bank and investment statements.

XII. NARRATIVE OF MATERIAL TRANSACTIONS AND INVESTMENT ACTIVITY

[________________________________
________________________________
________________________________
________________________________]

XIII. BENEFICIARY OBJECTION MECHANISM

If a beneficiary challenges a transaction disclosed or sufficiently described
in this report, the beneficiary should, within 30 months after the report was
sent:

1. Notify the trustee in writing of the challenge or claim;
2. Provide in writing the basis for that challenge or claim;
3. Deliver that written notice to the trustee at the address in Section I.

The subsection (a) bar applies only when every condition in 20 Pa.C.S.
§ 7785(a)(1) is satisfied. A timely written challenge does not itself commence
a court or arbitration proceeding. Section 7785(b)(1.1) sets a separate
five-year limit for a preserved claim, subject to the subsection (b)(3)
exception for certain timely court filings. Other statutory bars may also apply.

Beneficiaries may request supporting documentation such as bank statements, brokerage statements, and invoices from the trustee. A beneficiary seeking a court accounting should pursue the procedure available under applicable law.

XIV. OPTIONAL RECEIPT AND LIMITED RELEASE (ATTACHMENT)

RECEIPT AND LIMITED RELEASE

The undersigned beneficiary of the [____________________________] Trust:

1. ACKNOWLEDGES RECEIPT of the foregoing Annual Trust Accounting covering the period [__/__/____] through [__/__/____], together with the conspicuous § 7785 statement and supporting schedules.

2. Has reviewed the following identified transactions, and only these transactions, with an opportunity to seek independent advice: [DESCRIBE EACH TRANSACTION AND ACCOUNT PAGE: ________________________________________________].

3. RELEASES the Trustee, to the extent permitted by 20 Pa.C.S. § 7789, from claims for breach of trust concerning only the transactions listed in paragraph 2. This release does not cover an undisclosed transaction, a future act, or a release induced by the Trustee's improper conduct.

4. ACKNOWLEDGES that signing this attachment is voluntary and that the beneficiary has had the opportunity to review the accounting with independent counsel.

Beneficiary Signature: _________________________________
Print Name: [________________________________]
Date: [__/__/____]

Witness (optional): _________________________________

XV. TRUSTEE CERTIFICATION

I, the undersigned Trustee of the [____________________________] Trust, certify that:

1. I am the duly appointed and acting Trustee (or Co-Trustee) of the above-named trust.

2. I have prepared, or caused to be prepared under my supervision, the foregoing Annual Trust Accounting for the period [__/__/____] through [__/__/____].

3. To the best of my knowledge, information, and belief, after reasonable inquiry, the schedules and narrative set forth above are true, correct, and complete in all material respects.

4. The accounting includes all material receipts, disbursements, distributions, trustee compensation, agent and advisor fees, liabilities, and assets of the trust as of the dates indicated.

5. I have sent this Annual Trust Accounting to each current beneficiary who requested a report under 20 Pa.C.S. § 7780.3(i)(5) and to each other recipient required by the Trust or applicable law, as recorded in Section XVI.

6. I have not knowingly omitted a material transaction from this report.

Executed at: [City], Pennsylvania
Date: [__/__/____]

Trustee Signature: _________________________________
Print Name: [________________________________]
Title: Trustee of the [________________________________] Trust

XVI. PROOF OF DELIVERY TO BENEFICIARIES

I, the undersigned, hereby certify that on [__/__/____], I served a true and correct copy of this Annual Trust Accounting (including the § 7785(a)(1)(iv) conspicuous statement and all schedules) upon the following current beneficiaries by the methods indicated:

I certify that the delivery details above are accurate to the best of my knowledge.

Trustee Signature: _________________________________
Date: [__/__/____]

Sources and References

• 20 Pa.C.S. § 7780.3 — Duty to inform and report (current beneficiary's right to annual reports upon request).
• 20 Pa.C.S. § 7785 — Limitation of action against trustee (30-month bar; conspicuous notice requirement).
• 20 Pa.C.S. § 7785.1 — A separate process for nonjudicial account settlement.
• 20 Pa.C.S. § 7789 — Beneficiary consent, release or ratification; improper-conduct exception.
• 20 Pa.C.S. § 7768 — Trustee's compensation.
• 20 Pa.C.S. § 7780 — Trustee recordkeeping.

END OF ANNUAL TRUST ACCOUNTING