Request By:
Mr. John R. Cummins
Attorney at Law
3300 First National Tower
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your question is whether fiduciaries other than personal representatives of estates can file informal periodic and final settlements.
KRS 25.175 requires periodic accounting and settlements by fiduciaries within the frame of the appointing court's orders of approval and confirmation of such reports of receipts and disbursement. The term "fiduciary" is a broad term. As defined by KRS 395.001, "fiduciary" as used in KRS 25.175 means any person, association, or corporation (other than assignee or trustee for an insolvent debtor or a guardian under the Uniform Veterans' Guardianship Act) appointed by, or under the control of, or accountable to, the county court, including executors, administrators, administrators with the will annexed, testamentary trustees, curators, guardians and committees.
KRS 25.172 is the provision permitting informal settlements under certain conditions. KRS 25.172(2) provides in part that if a proposed settlement of a fiduciary is accompanied by a verified waiver executed by all of the "beneficiaries of an estate," etc., the court shall accept an informal settlement. (Emphasis added). The informal position of the local county court has been that the reference to the "estate" limits this provision's application to personal representatives of estates, to the exclusion of all other fiduciaries.
KRS 25.175 speaks in terms of a fiduciary and a "trust estate. " We are of the opinion that KRS 25.175 and 25.172, relating to settlements, must be construed together. "Statutes in pari materia should be construed together and, if possible, should be construed so as to harmonize and give effect to the provisions of each." Economy Optical Co. v. Kentucky Board of Opt. Exam., Ky., 310 S.W.2d 783 (1958) 784. Thus the broad definition of fiduciary in KRS 395.001 applies to both KRS 25.175 (periodic accounting of fiduciaries) and 25.172 (informal settlements) . This definition in KRS 395.001 of "fiduciary" clearly extends beyond the category of personal representatives of decedent's estates. As you say, the use of the word "estate" in KRS 25.172 was intended to refer to all "trust estates", and includes therein any property held by any fiduciary in a trust capacity. The word "estate", in the absence of any limitation by the context, means all property of any kind. See Jennings v. Jennings, 299 Ky. 779, 187 S.W.2d 459 (1945) 463. While Jennings involved the law of wills, the same broad definition would apply to any trust estate or any "estate" held by a fiduciary of any kind, including a guardian or committee. As stated in Black's Law Dictionary (4th ed.) p. 643, "the word 'estate' is a word of the greatest extension, and comprehends every species of property, real and personal. It describes both the corpus and the extent of interest. Deering v. Tucker, 55 Me. 284; Frazer v. First Nat. Bank of Mobile, 235 Ala. 252, 178 So. 441, 444."
Further, as you suggest, the word "estate" in KRS 25.172 is not used in a narrow, technical sense. There is no specific statutory definition of "estate."
We conclude that any fiduciary, as defined in KRS 395.001, can file an informal settlement, provided that the terms of the statute are met. Subsection (3) of KRS 25.172 provides that in the event one or more of the beneficiaries of the estate is under a disability, the court may allow the filing of an informal settlement if the court is of the opinion that the best interests of the person under disability would be served. That is the subdivision which extends the application of the statute beyond personal representatives of decedents, for that language and apply to guardians and committees as well as to beneficiaries of decedent's estate.
As concerns testamentary trustees, KRS 386.715(3) provides that upon reasonable request, a beneficiary is entitled to a statement of the accounts of the trust annually and on termination of the trust or change of trustee. You ask if that statute in any way lessens the trustee's obligation to file settlements with the court of jurisdiction. The answer is "no". We are of the opinion that the legislature here was simply addressing the duty of a trustee to inform and account to beneficiaries. KRS 25.175, requiring periodic accounting and settlements by fiduciaries, is still intact and is in no sense modified or amended by KRS 386.715. KRS 25.172, in stating that under certain conditions the court may dispense with the requirements of KRS 25.175 through 25.215 in accepting an informal settlement, clearly indicates that KRS 25.175 is considered by the legislature to be operative, and not repealed nor amended.