The duty to inform, the instrument on request and the optional report under New Jersey law

Keeping the qualified beneficiaries informed, and the instrument on request

N.J.S.A. 3B:31-67(a) provides that a trustee keeps the qualified beneficiaries reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests and, unless unreasonable under the circumstances, promptly responds to a beneficiary's request for information related to the administration of the trust. N.J.S.A. 3B:31-67(b) provides that a trustee, upon request of a beneficiary, promptly furnishes the beneficiary a copy of the trust instrument — any beneficiary, not only a qualified one. The qualified beneficiaries are those who, on the date of determination, are distributees or permissible distributees of trust income or principal, or would be if the current distributees' interests ended that day or the trust terminated that day (N.J.S.A. 3B:31-3).

To a person other than a beneficiary, the trustee may furnish a certification of trust instead of the instrument (N.J.S.A. 3B:31-81(a)); a recipient may require the excerpts that designate the trustee and confer the power to act in the pending transaction (N.J.S.A. 3B:31-81(e)), and a person who demands the instrument beside a certification is liable for damages if the court finds the demand was not in good faith (N.J.S.A. 3B:31-81(g)). What a particular request calls for is a question for a licensed New Jersey attorney of your choosing.

The report: optional, with stated contents

New Jersey requires no periodic account of a trustee outside court. N.J.S.A. 3B:31-67(c) provides that a trustee seeking the protection of N.J.S.A. 3B:31-74 may provide the beneficiaries with a report of the trust property, liabilities, receipts and disbursements, including the source and amount of the trustee's compensation, a listing of the trust assets and, if feasible, their respective market values. The statute states contents, not a form, a calendar date or a filing.

A trustee settles an account in the Superior Court at the intervals the court may require, and may settle a first account within a year of appointment or as soon as practicable (N.J.S.A. 3B:17-3); a trustee of a nontestamentary trust may settle intermediate and final accounts there (N.J.S.A. 3B:17-10). A court account is begun by a complaint and order to show cause in the county of appointment, with the account annexed and principal and income stated separately (R. 4:87-1; R. 4:87-3), and a judgment allowing it is res judicata as to the matters it covers (N.J.S.A. 3B:17-8). A release from an adult, capable beneficiary dispenses with a court account (N.J.S.A. 3B:17-1), and an instrument settling or waiving an account signed by every person who would have to be joined binds those with future interests to the same extent (N.J.S.A. 3B:17-13).

The terms, the age-35 floor and the revocable period

The terms of a trust prevail over the code except for the eleven rules of N.J.S.A. 3B:31-5(b). The duties to inform and to furnish the instrument are otherwise default rules, but one floor is mandatory: the duty under N.J.S.A. 3B:31-67(a) and (b) to respond to the request of a qualified beneficiary of an irrevocable trust who has attained the age of 35 for a copy of the trust instrument or for information reasonably related to the administration of the trust (N.J.S.A. 3B:31-5(b)(7)).

While a trust is revocable, the rights of the beneficiaries are subject to the control of the settlor and the duties of the trustee are owed exclusively to the settlor (N.J.S.A. 3B:31-44) — New Jersey enacted the sentence without a capacity clause, so the switch is the revocability itself. Whether a particular instrument varies a duty, and when the settlor's control ended, are questions a licensed New Jersey attorney of your choosing answers from the instrument and the facts.

The six months a report can start

N.J.S.A. 3B:31-74(a) provides that a beneficiary may not commence a proceeding against a trustee for breach of trust more than six 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; a report adequately discloses a potential claim if it provides sufficient information so that the beneficiary or representative knows of the potential claim or should have inquired into its existence (N.J.S.A. 3B:31-74(b)). Where subsection (a) does not apply, a proceeding is commenced within five years after the first of the trustee's removal, resignation or death, the termination of the beneficiary's interest or the termination of the trust — and never before five years after the beneficiary has attained majority, has knowledge of the existence of the trust and has knowledge of being a beneficiary (N.J.S.A. 3B:31-74(c)); fraud or a misrepresentation related to the report is excepted (N.J.S.A. 3B:31-74(e)).

Whether a particular report adequately disclosed a claim, and when a period began, are questions a licensed New Jersey attorney of your choosing answers from the report itself.

Les textes de loi, mot pour mot

• Accounts of guardians and trustees

  N.J.S.A. 3B:17-3 ↗

  Explication claire et simple ; le texte intégral de la loi n'est pas encore attesté dans notre bibliothèque. Consultez la loi officielle via le lien ci-dessus.

• Default and mandatory rules

  N.J.S.A. 3B:31-5 ↗

  Explication claire et simple ; le texte intégral de la loi n'est pas encore attesté dans notre bibliothèque. Consultez la loi officielle via le lien ci-dessus.

• Duty to disclose and discretion to periodically report

  N.J.S.A. 3B:31-67 ↗

  Explication claire et simple ; le texte intégral de la loi n'est pas encore attesté dans notre bibliothèque. Consultez la loi officielle via le lien ci-dessus.

• Limitation of action against trustee

  N.J.S.A. 3B:31-74 ↗

  Explication claire et simple ; le texte intégral de la loi n'est pas encore attesté dans notre bibliothèque. Consultez la loi officielle via le lien ci-dessus.

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