Annual Trust Accounting (Pennsylvania)

ANNUAL TRUST ACCOUNTING

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

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)

B-1. Income Receipts

B-2. Principal Receipts

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

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) separately bars a
preserved claim if that proceeding begins more than five years after the
trustee sent the report. Other statutory bars and exceptions may also apply.

Beneficiaries may also (a) request a copy of supporting documentation (bank statements, brokerage statements, tax returns, invoices) from the trustee in writing, or (b) demand a formal accounting in the Orphans' Court Division of the Court of Common Pleas under Pa. O.C. Rules Ch. III.

XIV. RECEIPT, RELEASE, AND REFUNDING AGREEMENT (ATTACHMENT)

RECEIPT, RELEASE, AND REFUNDING AGREEMENT

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. APPROVES the trustee's administration of the trust during the accounting period and ratifies all acts of the trustee disclosed therein.

3. RELEASES AND DISCHARGES the trustee, individually and in fiduciary capacity, from any and all claims, demands, causes of action, and liability for any act or omission occurring during the accounting period that has been disclosed in the accounting or that the beneficiary knew or should have known about, EXCEPT for liability for acts or omissions committed in bad faith or with reckless indifference to the purposes of the trust or the interests of the beneficiaries (which liability cannot be released as a matter of Pennsylvania law under 20 Pa.C.S. § 7788).

4. AGREES TO REFUND to the trustee any sum that may be required to satisfy any subsequently asserted lawful claim against the trust to the extent of any distribution received by the beneficiary during the accounting period.

5. ACKNOWLEDGES that the beneficiary has had the opportunity to review the accounting with independent counsel.

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

Witness: _________________________________
Notary Acknowledgment: [Attach separate notarial certificate]

XV. TRUSTEE VERIFICATION

I, the undersigned Trustee of the [____________________________] Trust, hereby verify under penalty of perjury under the laws of the Commonwealth of Pennsylvania:

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 served this Annual Trust Accounting upon each current beneficiary entitled to receive it under 20 Pa.C.S. § 7780.3(i)(5), and upon any other person entitled to receive it under the trust instrument or applicable representation provisions of 20 Pa.C.S. §§ 7721–7726.

6. I made this verification under penalty of perjury knowing that false statements herein are punishable under the laws of the Commonwealth of Pennsylvania, including 18 Pa.C.S. § 4904 (relating to unsworn falsification to authorities).

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

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

XVI. NOTARIZATION

COMMONWEALTH OF PENNSYLVANIA
COUNTY OF [________________________________]

On this [____] day of [____________], 20[____], before me, the undersigned notary public, personally appeared [________________________________], who acknowledged execution of the foregoing Annual Trust Accounting and Trustee Verification.

_________________________________
Notary Public
My Commission Expires: [__/__/____]

[NOTARY SEAL]

XVII. 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 declare under penalty of perjury under the laws of the Commonwealth of Pennsylvania that the foregoing is true and correct.

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 — Nonjudicial account settlement (trust termination, trustee discharge).
• 20 Pa.C.S. § 7788 — Exculpation of trustee (cannot release bad faith or reckless indifference).
• 20 Pa.C.S. § 7768 — Trustee's compensation.
• 20 Pa.C.S. Ch. 81 — Principal and Income Act of 2002 (income/principal allocation).
• 20 Pa.C.S. §§ 7721–7726 — Representation framework.
• Pennsylvania Orphans' Court Rules, Chapter III (formal court accountings).
• Estate of Pew, Pennsylvania accountings authority.
• In re Tracy, Pennsylvania authority on Receipt & Release effectiveness.
• Act of July 7, 2006, P.L. 625, No. 98 (PA Uniform Trust Act, effective Nov. 6, 2006).

END OF ANNUAL TRUST ACCOUNTING