The New Jersey Uniform Trust Code – Part 10D: Duties, Defenses and Liabilities of Trustees, Including Limitations of Actions for Trustee Liability
D. The Duty to Disclose
Section 813 of the model UTC is among the most controversial provisions. It is adopted in N.J.S.A. § 3B: 31-67. Both the model and New Jersey versions deal with the trustee’s duties of disclosure. The basic concept is not controversial; the level of disclosure is. See generally Kevin D. Millard, The Trustee’s Duty to Inform and Report Under the Uniform Trust Code, 40 Real Prop. Prob. & Tr. J. 373, 383 (2005).
N.J.S.A. § 3B: 31-67(a) confirms that a trustee “shall” keep the “qualified beneficiaries” of the trust reasonably informed about the trust administration and of material facts for those beneficiaries to protect their interests. Note two key qualifications maintained from the model act: the duty is mandatory (“shall”); but it applies only to “qualified beneficiaries” – a term defined carefully in both the model act and the NJ UTC, and surveyed elsewhere in this article.
The NJ UTC and the national UTC likewise are consistent as to the trustee’s need to respond to any beneficiary’s request for reasonable information as to the trust administration, including a copy of the trust instrument. More specifically, a trustee is required to “promptly respond to a beneficiary’s request for information related to the administration of a trust,” unless unreasonable under the circumstances. N.J.S.A. § 3B:31-67(a). Note that this provision does not limit the notice requirement to qualified beneficiaries. Therefore, trustees are required to respond to requests from all beneficiaries.
Upon request of a beneficiary, a trustee “shall promptly furnish to the beneficiary a copy of the trust instrument.” N.J.S.A. § 3B:31-67(b).
The NJ UTC then departs from the model act as to the further duties of disclosure. For instance, the model UTC enumerates certain information the trustee must disclose within given time periods. The NJ UTC does not adopt them.
However, the NJ UTC does allow a trustee to invoke certain protections – under N.J.S.A. § 3B: 31-74, discussed above under trustee defenses and limitation of actions – if the trustee decides to 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 trust assets, and, if feasible, their respective market values.” N.J.S.A. § 3B:31-67(c).