On appeal from the Superior Court of New Jersey, Chancery Division, Probate Part, Bergen County, Docket No. P-174-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 13, 2011
Before Judges Payne and Reisner.
In this probate dispute, defendants Helen Mecca and Peggy Ann Mecca appeal from a January 28, 2001 order requiring them to file an informal accounting.*fn1 We affirm.
Helen Mecca, who is Gennaro Mecca's widow, and Peggy Mecca, one of their daughters, are the trustees of three testamentary trusts created under sections 8, 9 and 10 of Gennaro's will. Pursuant to the will, Helen is the income beneficiary of the trusts, and the couple's five children, including Anna Mecca, are the remainder beneficiaries.*fn2 If any of the children predecease Helen, the deceased child's share of the estate will go to his or her descendants. Under the terms of the will, Helen is also entitled to some portion of the trust principal during her lifetime, but no more than five percent per year.
At issue in this appeal is section 15.02 of the will, which excuses the trustees from filing formal accountings with a court, but requires them to render annual informal accountings to the income beneficiaries and the vested remainder beneficiaries ("remaindermen"):
However, the Trustee shall render an annual (or more frequent) account and may, at any other time, including at the time of the death, resignation or removal of any Trustee, render an intermediate account of the Trustee's administration to such of the then current income beneficiaries and vested remaindermen who are of sound mind and not minors at the time of such accounting. The written approval of such accounting by all of such beneficiaries and remaindermen shall bind all persons then having or thereafter acquiring or claiming any interest in any trust .
Gennaro died in December 2001, leaving a very substantial estate.*fn3 His will was admitted to probate in January 2002. On May 17, 2010, Anna filed a complaint alleging that despite her repeated requests, the trustees had never provided the informal accountings required by the will. She sought an accounting of the trusts. She also demanded an accounting of the entire estate, although she ultimately did not pursue that aspect of the complaint. The trustees resisted the complaint, arguing that Anna was not a "vested" remainder beneficiary or a current income beneficiary and was therefore not entitled to an accounting. They also contended that the lawsuit was motivated by friction within the family over issues unrelated to Gennaro's estate, rather than by genuine concern over possible mismanagement of the trust assets.
As part of the pre-trial proceedings, the parties deposed Gilbert Levine, Esq., the scrivener of the will. Levine testified that the purpose of permitting informal accountings was to avoid the expense associated with formal accountings and thereby preserve more estate assets for the beneficiaries. Levine did not recall discussing section 15 of the will with Gennaro or Helen, but stated that his clients were usually concerned with "ensuring the right people end up with the money" and were not concerned with "administrative provisions" such as accountings. Typically, when reviewing such a will with clients, he would simply explain that it did not require a formal accounting.
According to Levine, the accounting provision would require Helen, as trustee, to account to herself and to the "other beneficiaries." Likewise, if Helen were incapacitated and Peggy were acting as sole trustee, Peggy would be required to account to Helen and to her siblings. Levine insisted that "the objective is to not only ensure that the income beneficiary is protected should they not be serving as trustee, but also to ensure that the remaindermen are protected." When asked whether the latter would have to survive the income beneficiary in order to be considered "vested," Levine responded that they would not, because otherwise "the only people who could be vested would be immortals." Levine also explained that the term "income beneficiaries" was standard language that he had used in other wills; it did not imply that no accounting was required if there was only one income beneficiary.
After briefing and oral argument, Judge Contillo issued an oral opinion on the record on January 14, 2011. He rejected defendants' arguments that an accounting was only needed if Helen was not a trustee, and that a remainder beneficiary would have to first survive Helen in order to be considered "vested." He found it unlikely that Gennaro would have intended a different accounting requirement depending on which spouse pre-deceased the other. He characterized defendants' arguments as "very nuanced" and unlikely to comport with the intent of the testator. Instead, the judge construed the plain language of section 15.02 in what he deemed the most straightforward manner, as requiring the trustees to make an informal accounting to both the income beneficiary or beneficiaries, and to the remainder beneficiaries. Using that approach, he found that "Anna is a ...