Section 4B: Fiduciaries; disclosure statements; contents
Section 4B. Prior to the execution by a customer of any document creating a fiduciary relationship, the fiduciary, if on notice of the customer's intent to execute such document, shall furnish to the customer a written or printed statement which is clear and understandable and applicable to the type of fiduciary business contemplated by the customer and which shall contain the following information:—
(a) That a fiduciary cannot act as executor unless there is a will or codicil nor as administrator of the will annexed unless there is a will, nor as trustee unless there is a will or instrument creating a trust for the care and management of property, nor as an executor or administrator of an estate, or a guardian, conservator or trustee under a will unless appointed by the court of jurisdiction.
(b) That, unless the fiduciary is himself an attorney, the customer should obtain and pay for the services of an attorney at law of his own selection to represent his interests and to plan and draft any will, instrument creating a trust, or other trust or fiduciary document, including documents required by a probate court, and that the fiduciary may have such documents reviewed by counsel representing its interests.
(c) That the interests of the customer, his estate and the beneficiaries under any will or instrument creating a trust may at times be in conflict with the interests of the named fiduciary or fiduciaries.
(d) That the officers and employees of a trust company may not engage in the practice of law, which includes the preparation of documents described in clause (b), and may not appear for the customer or his estate before the courts; and that many persons in the employ of the trust company contribute to the management and servicing of fiduciary accounts, and that personnel of a trust company will change with the passage of time.
(e) That if the customer desires to have a trust company act as guardian or conservator, a petition for appointment of a trust company must be prepared and presented to the probate court by an attorney at law, and that the trust company cannot act as guardian of the person but only of the estate.
(f) That, with regard to charges and fees, the fiduciary shall furnish to the customer a statement of all charges, currently applicable, which such prospective fiduciary makes for the services to be performed in its capacity as such fiduciary, and that such charges may be subject to change in the future; a statement setting forth in reasonable detail what services, under conditions existing at the time, will be rendered for the fee described; a statement that legal services, whether performed by an independent attorney or performed by the fiduciary in his capacity as an attorney, are payable in addition to the compensation of the fiduciary; and a statement as to whether the existence of one or more co-fiduciaries will increase the total compensation payable from the account.
(g) That, with regard to investments, the fiduciary shall, if it is contemplated that any part of the customer's estate will be invested in any common or pooled fund operated by the fiduciary, furnish to the customer a copy of the most recent audited published report of such fund, and if such is not available, a copy of the following information on such fund: the history and purpose of the fund; the investment policy and investments permitted; the management; provisions for payment of dividends; provisions for capital gains; provisions for purchasing participations; provisions for redeeming participations; compensation for management each year; certified audit and statement of assets; certified statement of fees and expenses charged against the fund; a complete list of investments; and if the funds are to be separately invested, a description of the fiduciary's facilities and procedures for selecting and supervising investments.
In the case of one or more individuals serving with a trust company as co-trustees, the disclosures required by the preceding paragraphs may be made in a joint statement affirmed by each co-trustee.