Core duties · 4 min read
Adequate records, separate property and designation
N.J.S.A. 3B:31-64 provides that a trustee keeps adequate records of the administration of the trust (a); keeps trust property separate from the trustee's own property (b); except as otherwise provided, causes the trust property to be designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary (c); and may invest as a whole the property of two or more separate trusts if the trustee maintains records clearly indicating the respective interests (d). Beside those duties, the trustee takes reasonable steps to take control of and protect the trust property (N.J.S.A. 3B:31-63).
What the report and the court account draw on
A trustee's report — the trustee's election under N.J.S.A. 3B:31-67(c) — sets out 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. A court account, where the court requires one or the trustee elects it (N.J.S.A. 3B:17-3; N.J.S.A. 3B:17-10), is begun by complaint and order to show cause in the county of appointment, filed at least twenty days before the settlement day (R. 4:87-1), and annexes the account with a summary of charges and allowances, corpus and income stated separately, and a statement of the assets with their inventory or acquisition values and current values, where and in whose name they are held, and every change since the last account (R. 4:87-3); the Surrogate audits and reports (R. 4:87-6), and a judgment allowing the account is res judicata as to the matters it covers (N.J.S.A. 3B:17-8). Records kept as the administration goes are what both draw on, and a report that adequately discloses a potential claim and states the time allowed starts the six-month period of N.J.S.A. 3B:31-74(a).
Contracts, title and the certification
Except as the contract provides otherwise, a trustee is not personally liable on a contract properly entered into in the fiduciary capacity in the course of administering the trust if the trustee disclosed the fiduciary capacity in the contract (N.J.S.A. 3B:31-79(a)). Title to trust property may be taken in the name the certification of trust states (N.J.S.A. 3B:31-81(a)), and a transfer to "the trust" rather than to the trustee is not invalid for that reason (N.J.S.A. 3B:31-19(d)). A person other than a beneficiary who in good faith assists or deals with a trustee, without knowledge that the trustee is exceeding or improperly exercising the trustee's powers, is protected as if the trustee had properly exercised them (N.J.S.A. 3B:14-37).
The statutes, verbatim
Accounts of guardians and trustees
N.J.S.A. 3B:17-3 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Recordkeeping and identification of trust property
N.J.S.A. 3B:31-64 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Duty to disclose and discretion to periodically report
N.J.S.A. 3B:31-67 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Limitation on personal liability of trustee
N.J.S.A. 3B:31-79 ↗Clear, simple explanation; the verbatim statute text is not yet attested in our library. See the official statute via the link above.
Common questions
Must a New Jersey trustee keep trust money in a separate account?
A trustee keeps adequate records of the administration, keeps trust property separate from the trustee's own and causes the property to be designated so that the trust's interest appears in a third party's records (N.J.S.A. 3B:31-64(a), (b), (c)).
How long should a New Jersey trustee keep records?
The statute sets no retention period. A report is the trustee's election (N.J.S.A. 3B:31-67(c)), and the limitation periods run six months after a report that adequately discloses a claim and states the time allowed, and otherwise five years after the first of the trustee's departure, the end of the beneficiary's interest or the trust's termination, tolled until five years after the beneficiary attains majority and knows of the trust (N.J.S.A. 3B:31-74). How long to keep the record is a question for a licensed New Jersey attorney of your choosing.
How does a New Jersey trustee sign a contract?
The statute asks that the trustee disclose the fiduciary capacity in the contract: a trustee who does so is not personally liable on a contract properly entered into in that capacity in the course of administering the trust, unless the contract provides otherwise (N.J.S.A. 3B:31-79(a)). The statute prescribes no particular words.
Related reading
The Learning Center is general information about New Jersey law — not legal advice, and not a substitute for advice from a licensed New Jersey attorney about your specific facts. TrusteeClear is software, not a law firm.
Frequently asked questions
- Must a New Jersey trustee keep trust money in a separate account?
- A trustee keeps adequate records of the administration, keeps trust property separate from the trustee's own and causes the property to be designated so that the trust's interest appears in a third party's records (N.J.S.A. 3B:31-64(a), (b), (c)).
- How long should a New Jersey trustee keep records?
- The statute sets no retention period. A report is the trustee's election (N.J.S.A. 3B:31-67(c)), and the limitation periods run six months after a report that adequately discloses a claim and states the time allowed, and otherwise five years after the first of the trustee's departure, the end of the beneficiary's interest or the trust's termination, tolled until five years after the beneficiary attains majority and knows of the trust (N.J.S.A. 3B:31-74). How long to keep the record is a question for a licensed New Jersey attorney of your choosing.
- How does a New Jersey trustee sign a contract?
- The statute asks that the trustee disclose the fiduciary capacity in the contract: a trustee who does so is not personally liable on a contract properly entered into in that capacity in the course of administering the trust, unless the contract provides otherwise (N.J.S.A. 3B:31-79(a)). The statute prescribes no particular words.
General information about New Jersey law, not legal advice.