Rule 38 - Fiduciary Accounting: Requirements for AccountsSection 38.1 When principal and income to be reported separately(a) Except as provided in subsections (b) through (d), a fiduciary submitting an account may combine principal and income transactions in accordance with section 38.2.(b) The fiduciary of a decedent's estate shall report principal and income transactions separately in accordance with section 38.3 if:(1) the will provides for a distribution to a trustee of a trust that has differing income and principal interests;(2) the will establishes a life interest in intangible personal property; or(3) the surviving spouse elects against the will under C.G.S. section 45a-436.(c) The trustee of a trust shall report principal and income transactions separately in accordance with section 38.3 if the will or other governing instrument provides for differing income and principal interests.(d) On motion of a party or on the court's own motion, the court may require a fiduciary to submit an account reporting principal and income transactions separately in accordance with section 38.3 if the court determines that separate accounting is necessary to accomplish the purposes of the estate. (Probate Court Rules, rule 36.)
Section 38.2 Contents of account when principal and income transactions combined(a) An account that combines income and principal transactions shall contain the following summary parts: (1) assets and income received by the fiduciary; and(2) payments and distributions by the fiduciary and estate on hand.(b) The part reporting assets and income received by the fiduciary shall summarize all transactions during the accounting period that result in an increase in the amount of the estate and shall include:(1) the fiduciary acquisition value of assets at the beginning of the accounting period as reported on the inventory or the most recent financial report or account;(2) the fiduciary acquisition value of additional assets received;(3) cash advanced to the estate by the fiduciary or another person;(5) capital gains realized on the sale of assets; and(6) adjustments increasing fiduciary acquisition value under section 36.14.(c) The part reporting payments and distributions by the fiduciary and estate on hand shall summarize all transactions during the accounting period that reduce the amount of the estate and shall include:(1) administration expenses;(2) in a decedent's estate:(A) funeral expenses; and(B) claims paid to creditors;(3) capital losses realized on the sale of assets;(4) adjustments decreasing fiduciary acquisition value under section 36.14;(5) the fiduciary acquisition value of distributions to heirs or beneficiaries before the end of the accounting period;(6) the fiduciary acquisition value of assets on hand at the end of the accounting period; and(7) if a final account, the fiduciary acquisition value of proposed distributions and any proposed reserve.(d) The account shall include:(1) a schedule itemizing additional assets received;(2) a schedule listing the total amount of administration expenses in each major category including, but not limited to, fiduciary fees, attorney's fees, accounting expenses, probate fees, taxes, probate bond premiums, publication expenses and other expenses;(3) a statement indicating whether any person who made a cash advance to the estate expects to be reimbursed;(4) a schedule listing the total amount of income in each major category including, but not limited to, interest, dividends, pension, social security, annuities, wages and rent;(5) schedules showing the calculation of capital gain or loss for each asset sold during the accounting period;(6) a schedule itemizing asset purchases;(7) a schedule itemizing sales of assets or other capital changes not resulting in capital gains or losses;(8) a schedule itemizing assets on hand, shown at both fiduciary acquisition value and fair market value at the end of the accounting period, except that real property and difficult to value assets may be reported at fiduciary acquisition value;(9) a schedule itemizing distributions made to each heir or beneficiary during the accounting period;(10) if a final account: (A) a schedule itemizing distributions proposed to be made to each heir or beneficiary after approval of the account; and(B) a schedule explaining the purpose of any proposed reserve; and(11) any other schedule necessary to provide details or explanatory notes.(e) The account shall include a cash account balancing all cash receipts with cash disbursements and cash on hand at the end of the accounting period. Cash receipts shall be reported in each major category including, but not limited to, cash on hand at the beginning of the accounting period, additional cash receipts, income receipts and proceeds from sales of assets. Cash disbursements shall be reported in each major category including, but not limited to, administration expenses, claims, purchases of assets and distributions.(f) A final account for a decedent's estate shall include a statement that all funeral expenses, administration expenses, taxes and claims have been paid and all bequests and devises have been or will be distributed.(g) On motion of a party or on the court's own motion, the court may modify the required contents of an account under this section.(C.G.S. section 45a-597.)
Section 38.3 Contents of account when principal and income activities reported separately(a) If a fiduciary is required to report principal and income activities separately, the fiduciary shall designate each transaction as a principal or income transaction in accordance with the will or governing instrument and the Connecticut Principal and Income Act and shall report the transactions in accordance with this section.(b) An account that reports income and principal activities separately shall contain the following summary parts: (c) The part reporting principal charges shall summarize all transactions during the accounting period that increase the principal of the estate and shall include: (1) the fiduciary acquisition value of assets at the beginning of the accounting period as reported on the inventory or the most recent financial report or account;(2) the fiduciary acquisition value of any additional principal assets received;(3) cash advanced to the estate by the fiduciary or another person;(4) capital gains realized on the sale of principal assets; and(5) adjustments increasing the fiduciary acquisition value of any principal assets under section 36.14.(d) The part reporting principal credits shall summarize all transactions during the accounting period that decrease the principal of the estate and shall include: (1) administration expenses attributable to principal;(2) in a decedent's estate:(A) funeral expenses; and(B) claims paid to creditors;(3) capital losses realized on the sale of principal assets;(4) adjustments decreasing the fiduciary acquisition value of any principal assets under section 36.14;(5) the fiduciary acquisition value of distributions of principal assets to heirs or beneficiaries before the end of the accounting period;(6) the fiduciary acquisition value of principal assets on hand at the end of the accounting period; and(7) if a final account, the fiduciary acquisition value of proposed distributions of principal assets and any proposed reserve of principal assets.(e) The part reporting income charges shall summarize all income receipts during the accounting period and shall include: (1) the amount of income on hand at the beginning of the accounting period as reported on the inventory or the most recent financial report or account; and(2) the total amount of income received.(f) The part reporting income credits shall summarize all transactions during the accounting period that reduce the income of the estate and shall include: (1) administration expenses attributable to income;(2) distributions of income to heirs or beneficiaries before the end of the accounting period;(3) income on hand at the end of the accounting period; and(4) if a final account, proposed income distributions and any proposed reserve of income assets.(g) The account shall include the following schedules regarding principal transactions: (1) a schedule itemizing additional principal assets received;(2) a schedule itemizing administration expenses attributable to principal in each major category, including, but not limited to, fiduciary fees, attorney's fees, accounting expenses, probate fees, taxes, probate bond premiums, publication expenses and other expenses;(3) a statement indicating whether any person who made a cash advance to the estate expects to be reimbursed;(4) schedules showing the calculation of the capital gain or loss for each principal asset sold during the accounting period;(5) a schedule itemizing principal asset purchases;(6) a schedule itemizing sales of principal assets and other capital changes not resulting in capital gains or losses;(7) a schedule itemizing principal assets on hand, shown at both fiduciary acquisition value and fair market value at the end of the accounting period, except that real property and difficult to value assets may be reported at fiduciary acquisition value;(8) a schedule itemizing principal distributions made to each heir or beneficiary during the accounting period;(9) if a final account: (A) a schedule itemizing principal distributions proposed to be made to each heir or beneficiary after approval of the account; and(B) a schedule explaining the purpose of any proposed principal reserve; and(10) any other schedule necessary to provide details or explanatory notes.(h) The account shall include the following schedules regarding income transactions:(1) a schedule listing the total amount of income in each major category including, but not limited to, interest, dividends, pension, social security, annuities, wages and rent;(2) a schedule itemizing administration expenses attributable to income in each major category including, but not limited to, fiduciary fees, attorney's fees, accounting expenses, probate fees, taxes, probate bond premiums, publication expenses and other expenses;(3) a schedule itemizing income distributions made to each heir or beneficiary during the accounting period; and(4) if a final account:(A) a schedule itemizing income distributions proposed to be made to each heir or beneficiary after approval of the account; and(B) a schedule explaining the purpose of any proposed income reserve; and(5) any other schedule necessary to provide details or explanatory notes.(i) The account shall include a cash account balancing all principal cash receipts with principal disbursements and principal on hand at the end of the accounting period. Cash receipts shall be reported in each major category including, but not limited to, principal cash on hand at the beginning of the accounting period, additional principal cash receipts and proceeds from sales of assets. Cash disbursements shall be reported in each major category including, but not limited to, administration expenses attributable to principal, claims, purchases of principal assets and principal distributions.(j) A final account for a decedent's estate shall include a statement that all funeral expenses, administration expenses, taxes and claims have been paid and all bequests and devises have been or will be distributed.(k) On motion of a party or on the court's own motion, the court may modify the required contents of an account under this section.(C.G.S. sections 45a-542 through 45a-542ff and 45a-597.)
Section 38.4 Reporting distributions in account(a) Except as provided in subsection (b), a schedule itemizing distributions shall indicate both fiduciary acquisition value and fair market value as of the date of distribution.(b) Distributions may be shown at fiduciary acquisition value if each beneficiary in a class of beneficiaries entitled to the distribution will receive a proportionate share of each asset.(c) Unless otherwise directed by the court, miscellaneous tangible personal property not itemized on the inventory need not be itemized on an account.(d) A schedule itemizing distributions or proposed distributions shall include reference to the provisions of the will or other governing instrument directing or authorizing the distributions. Section 38.5 Account required to balance(a) An account shall balance in the manner provided in subsections (b) and (c).(b) In an account in which principal and income transactions are combined, the sum of all assets and income received by the fiduciary reported under section 38.2(b) shall equal the sum of all payments and distributions by the fiduciary and estate on hand reported under section 38.2(c).(c) In an account in which principal and income transactions are reported separately: (1) the sum of all principal charges reported under section 38.3(c) shall equal the sum of all principal credits reported under section 38.3(d); and(2) the sum of all income charges reported under section 38.3(e) shall equal the sum of all income credits reported under section 38.3(f). HISTORY: Rule 38 adopted effective July 1, 2013.
Adopted November 7, 2012, effective 7/1/2013.