Authorizes trustee of trust, under certain circumstances, to terminate service without filing formal accounting with court or obtaining release agreements from beneficiaries.

A4736

ASSEMBLY, No. 4736

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 16, 2026

Sponsored by:

Assemblywoman� ELLEN J. PARK

District 37 (Bergen)

SYNOPSIS

���� Authorizes trustee of trust, under certain
circumstances, to terminate service without filing formal accounting with court
or obtaining release agreements from beneficiaries.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning termination of trusteeship and supplementing
chapter 70 of Title 3B of the New Jersey Statutes.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1. �Statutory Settlement of
Trustee�s Administration.

���� a. �A trustee may settle its
account pursuant to this section if:

���� (1) �the trust terminates in
whole or in part;

���� (2) �the trustee ceases to
serve for any reason; or

���� (3) �the trustee seeks
discharge for an interim accounting period when it will continue to serve as
trustee.

���� b. When a trustee elects to
proceed pursuant to this section, the trustee shall, within a reasonable time,
give notice of a request for settlement of its account in the manner and to the
extent required by
section 1 of P.L.2015, c.276

(C.3B:31-9 and C.3B:31-10) to:

���� (1) �the qualified
beneficiaries of the trust;

���� (2) �any other beneficiary who
has sent the trustee a request for notice;

���� (3) �any person who has the
notification rights of a qualified beneficiary under section 1 of P.L.2015,
c.276 (C.3B:31-10); and

���� (4) �any co-trustee, successor
trustee, adviser, or other fiduciary.

���� c. �The trustee may also
provide notice to any other person who the trustee reasonably believes may have
an interest in the trust.

���� d. The notice under this
section shall provide:

���� (1) �The reason for providing
the notice;

���� (2) �To the extent applicable,
the proposed distribution of the net assets of the trust, including the
distributees and proportions to be distributed;

���� (3) �To the extent applicable,
an estimate of disbursements anticipated to be made prior to distribution,
including legal fees and trustee fees, if any;

���� (4) �Trust account statements
showing all transactions, including 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, the respective
fair market value of all assets for the six months prior to the date a trust
terminates, the cessation of the trustee�s service, or the end of the interim
accounting period, or for the entire term of the trust if the term of the trust
is shorter than the six-month period;

���� (5) �A statement that the
trustee seeks settlement of its account of the trust, including the period of
time for which the trustee seeks discharge of its account of the trust, and
that clearly and conspicuously states that claims against a trustee, including claims
under section 1 of P.L
.2015, c.276
(C.3B:31-71
through C.3B:31-81 and C.3B:31-45), will be forever barred if no objections are
received within the time period described in subsection f. of this section;

���� (6) �The name and mailing
address of the trustee; and

���� (7) �The name and telephone
number of a person who may be contacted for additional information.

���� e. �A person provided notice
under subsection b. or c. of this section may object to the settlement of a
trustee�s account by notifying the trustee in writing within 60 days after the
notice was sent. If the person provided notice makes timely objections to the
settlement of the trustee�s account, the trustee or the person making the
objections may:

���� (1) �submit the written
objection to the court and commence a proceeding for its resolution; or

���� (2) �resolve the objections by
nonjudicial settlement agreement under section 1 of P.L.2015, c.276
(C.3B:31-11).

���� f. �(1) �If no timely
objections are raised under subsection e. of this section, or if objections are
raised and subsequently resolved as provided by subsection e. of this section,
the settlement of the trustee�s account shall be deemed approved. If the trust
is terminating or the trustee is ceasing to serve as trustee, any assets held
in trust shall, within a reasonable time thereafter, be distributed subject to
payment of expenses. If the notice relates to an interim accounting period, the
assets shall continue to be administered in trust subject to payment of
expenses.

���� g. �The trustee may rely upon
the written statement of a person receiving notice that the person does not
object.

���� h.��� (1) �When settlement of
a trustee�s final account is deemed approved
pursuant
to
this section for a terminated trust or with respect to the duties of a
trustee who ceased to serve, each person who was sent notice pursuant to this
section is barred from bringing a claim against the trustee or challenging the
distribution of assets of the trust to the same extent and with the same
preclusive effect as if the court had entered a final, unappealable judgment
allowing the trustee�s final account in accordance with
section
1 of P.L.2015, c.276 (C.3B:17-8).

���� (2) �When settlement of a
trustee�s interim account is deemed approved pursuant to this section, each
person who was sent notice pursuant to this section is barred from bringing a
claim against the trustee for the period of the interim account to the same extent
and with the same preclusive effect as if the court had entered a final,
unappealable judgment allowing the trustee�s interim account in accordance with

section 1 of P.L.2015, c.276 (C.3B:
17-8).

���� i.� Nothing in this section
shall preclude a trustee from proceeding under section 1 of P.L.2015, c.276
(C.3B:17-3, C.
3B:17-10
, or C.3B:31-11).� If a
trustee proceeds in accordance with the terms of this section, the trustee will
have no requirement to file a release or discharge in accordance with section 1
of P.L.2015, c.276 (C.3B:17-1)

���� 2. �This act shall take effect
on the 180
th
day following enactment.

STATEMENT

���� This bill authorizes the trustee
of a trust, under certain circumstances, to terminate service without filing a formal
accounting with the court or obtaining release agreements from beneficiaries.

���� Currently, in order to
terminate service, the trustee must file a request with the Superior Court and
submit an accounting of the trust assets. In the alternative, the trustee may
terminate service by obtaining a release from all trust beneficiaries, as long
as the beneficiaries have reached the age of majority and are not
incapacitated.� In the view of the sponsor, these procedures may be time
consuming, costly, and delay distribution of the trust assets.

���� This bill would provide
another alternative.� It applies when a trust terminates in whole or in part; a
trustee ceases to serve for any reason; or a trustee seeks discharge for an
interim accounting period when the trustee will continue to serve as trustee.�
Under the bill, a trustee is required to provide notice to the trust
beneficiaries and any other fiduciary. The notice sets out the proposed
distribution of the trust assets; the disbursements to be made prior to
distribution, including any legal fees and trustee fees; trust account
statements showing liabilities, receipts and disbursements; a statement that
the trustee seeks settlement of its account of the trust, and that clearly
states that claims against a trustee will be forever barred if no objections
are received within 60 days after the notice is sent; and names and contact
information for the trustee and another person who may be contacted for
additional information.

���� The bill provides that a
person may object to the settlement of a trustee�s account by notifying the
trustee in writing within 60 days after the notice was sent. If the person
provided notice makes timely objections to the settlement of the trustee�s account,
the trustee or the person making the objections may submit the written
objection to the court and commence a proceeding for its resolution or resolve
the objections by nonjudicial settlement agreement pursuant to statute.

���� Under the bill, if no timely
objections are raised or if objections are raised and subsequently resolved,
the settlement of the trustee�s account will be deemed approved. If the trust
is terminating or the trustee is ceasing to serve as trustee, any assets held
in trust will, within a reasonable time, be distributed subject to payment of
expenses. If the notice relates to an interim accounting period, the assets
will continue to be administered in trust subject to payment of expenses.

���� The bill provides that when
settlement of a trustee�s final account or interim account is deemed approved
for a terminated trust or with respect to the duties of a trustee who ceased to
serve, each person who was sent notice is barred from bringing a claim against
the trustee or challenging the distribution of assets of the trust to the same
extent and with the same preclusive effect as if the court had entered a final
judgment in the matter allowing the trustee�s final account.