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Brauburger v. Sheridan

Decided: March 29, 1950.

GEORGE P. BRAUBURGER ET AL., SURVIVING TRUSTEES, ETC., PLAINTIFFS,
v.
MARTIN J. SHERIDAN, JR., ET AL., DEFENDANTS. GEORGE P. BRAUBURGER ET AL., AS TRUSTEE, ETC., PLAINTIFFS, V. ELINOR S. RILEY ET AL., DEFENDANTS



Jayne, J.s.c.

Jayne

These two plenary proceedings to obtain judicial settlements "under special circumstances" of the accounts of the trustees are instituted in pursuance of the authority conferred by Rule 3:94-3 of our civil practice.

The one (C-174-49) is the account presented by the surviving trustees of the trust created by the last will and testament of Martin J. Sheridan, deceased; the other (C-175-49) is that submitted by the trustees of an inter vivos trust originated on November 1, 1935, by Adrienne W. Sheridan, who was the life tenant of both trusts and also a co-trustee of the testamentary trust. Adrienne W. Sheridan, a resident of Hunterdon County, New Jersey, died on February 21, 1948.

In limine the defendants impugn the composition of the accounts. The accountants have listed in Schedule H of each account the assets of the trust as of the last day of the accounting period, stating only the present market or new revaluated book value.

Manifestly the accountants have ignored the requirements of Rule 3:95-2. It is incumbent upon an accountant to set forth in the statement of assets "the inventory value or the value when he acquired them and the value as of the day the account is drawn," and also to disclose "all changes made in the investments and assets since they were acquired or since the date of the last account, together with the dates when the changes were made." Dickerson v. Camden Trust Company , 1 N.J. 459, 464 (Sup. Ct. 1949). The requirements of the rule should be obeyed in the present accountings.

Such a statement is now regarded as a part of the account. P.L. 1947, c. 398, p. 1250, ยง 1, R.S. 3:10-18. This statute governs the effect of the allowance of the account in such circumstances, and it would seem to be applicable to intermediate as well as final accounts. Van Buren v. Plainfield Trust Co. , 130 N.J. Eq. 244 (Ch. 1941).

"In any event, to obtain that 'repose' to which a fiduciary is of right entitled (In re Rothenberg's Trust , 129 N.J. Eq. 377), the fiduciary should be required to make a full and complete disclosure of pertinent investment facts." Dickerson v. Camden Trust Co. , 140 N.J. Eq. 34, on page 51 (Ch. 1947). See In re Oathout's Estate , 25 N.J. Misc. 186 (Essex Orphans' Ct. 1947).

The executors of the estate of Adrienne W. Sheridan, deceased, and the trustees of her inter vivos trust of 1935 reasonably apprehend that a federal estate tax as well as a New Jersey transfer inheritance tax will be levied upon the assets which comprised the inter vivos trust. The trustees of the inter vivos trust therefore inquire relative to their liability, if any, to reimburse the executors of the decedent's estate for that portion of the federal estate tax assessed upon the transferred corpus of the inter vivos trust. Parenthetically I may

state that no incertitude exists with respect to the New Jersey transfer inheritance taxes.

Perhaps a present determination of the subject of inquiry is premature. Morristown Trust Co. v. Childs , 128 N.J. Eq. 524, 532 (Ch. 1940). Since, however, counsel in their briefs (in C-175-49) have fully exhibited the diversity of their contentions, I shall not postpone an expression of my opinion.

A comprehensive survey of the pertinent adjudications reveals that in the absence of a controlling statute or of a contrary testamentary direction, the full burden of federal estate taxes has been ...


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