(a) A trustee may obtain a settlement of its accounts in accordance with subsection (b) when any of the following occur:

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Terms Used In Alabama Code 19-3B-1306

  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
  • following: means next after. See Alabama Code 1-1-1
  • Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
  • person: includes a corporation as well as a natural person. See Alabama Code 1-1-1
  • Revocable trust: A trust agreement that can be canceled, rescinded, revoked, or repealed by the grantor (person who establishes the trust).
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Trustee: A person or institution holding and administering property in trust.
(1) A trust terminates pursuant to the terms of the trust.
(2) A trust terminates early pursuant to Section 19-3B-414.
(3) A trustee resigns or is removed.
(4) A trustee seeks discharge of an interim accounting period when the trust is continuing.
(b)

(1) A trustee who elects to proceed under this section shall provide all of the following to the qualified beneficiaries of the trust and the successor trustee, if applicable, within a reasonable time after termination of the trust pursuant to its terms, the resignation or removal of the trustee, or the end of the period for which the trustee is seeking discharge:

a. A statement showing the fair market value of the new assets to be distributed from a terminating trust or to a successor trustee.
b. A trust accounting for the prior two years showing all receipts and disbursements and inventory value of the net assets.
c. An estimate for any items reasonably anticipated to be received or disbursed.
d. The amount of any fees, including trustee fees, remaining to be paid.
e. Notice that the trust is terminating, or that the trustee has resigned or been removed, the time period for which the trustee seeks discharge of its accounts, and a statement providing that claims against a trustee under Section revocable trust; distribution of trust property” class=”unlinked-ref” datatype=”S” sessionyear=”2022″ statecd=”AL”>19-3B-604 and Section 19-3B-1005, if applicable, shall be barred if no objections are received within the time period described in subsection (c).
f. The name and mailing address of the trustee.
g. The name and telephone number of a person who may be contacted for additional information.
(2) The trustee may also provide the statement and notice described in this subsection to any other person who the trustee reasonably believes may have an interest in the trust.
(3) The statement and notice described in this subsection shall be provided in accordance with Section 19-3B-109.
(c)

(1) If, after receiving the notice and trust information described in subsection (b), a qualified beneficiary or any other party that received the notice and trust information objects to a disclosed act or omission, the qualified beneficiary shall provide written notice of the objection to the trustee not later than 45 days after the notice was sent by the trustee. If no written objection is provided in the 45-day time period, the information provided under subsection (b) shall be considered approved by the recipient. The trustee, in the case of a trust terminating pursuant to the terms of the trust or the trustee’s resignation or removal, within a reasonable period of time following the expiration of the 45-day time period, shall distribute the assets as provided in the trust or to the successor trustee. If a qualified beneficiary gives the trustee a written objection within the applicable 45-day time period, the trustee or the qualified beneficiary may do either of the following:

a. Submit the written objection to the court for resolution and charge the expense of commencing a proceeding to the trust.
b. Resolve the objection by a nonjudicial settlement agreement or other written agreement.
(2) Any agreement entered into pursuant to paragraph (1)b. may include a release, an indemnity clause, or both, on the part of the beneficiary against the trustee relating to the trust. If the parties agree to a nonjudicial settlement agreement or other written agreement, any related expenses shall be charged to the trust. Upon a resolution of an objection under this subsection, within a reasonable period of time, the trustee shall distribute the remaining trust assets as provided in the trust or to the successor trustee.
(d) The trustee may rely upon the written statement of a person receiving notice that the person does not object.
(e) When a trustee distributes assets of a terminating trust or to the successor trustee after complying with this article and having received no objections, each person who received notice and either consented or failed to object pursuant to this section is barred from doing either of the following:

(1) Bringing a claim against the trustee or challenging the validity of the trust to the same extent and with the same preclusive effect as if the court had entered a final order approving the trustee’s final account.
(2) Bringing a claim against the trustee for the period of such interim accounts to the same extent and with the same preclusive effect as if the court had entered a final order approving the trustee’s interim accounts.
(f) The court, as determined under Section 19-3B-203, shall have exclusive jurisdiction over matters under this section.
(g) Sections 19-3B-301 through 19-3B-304 shall apply to this section.
(h) Nothing in this section shall preclude a trustee from proceeding under Section 19-3B-201 to have the trustee’s accounts reviewed and settled by the court.
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