Request By:
Mr. P. Stephen Gordinier
Attorney at Law
1519 Citizens Plaza
Louisville, Kentucky 40202
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
Your problem relates to KRS 395.610, which deals with periodic accounting by fiduciaries. That statute provides in part that one year after appointment and annually thereafter, unless otherwise provided by law, every fiduciary must render an account of the execution of his trust to the court by which he was appointed. Elsewhere in that statute we find an exception to the annual accounting period. The statute states that guardians, committees and trustees under continuing trust, after their first accounting, shall render their accounts thereafter biennially, or at shorter intervals if the court shall require it.
The last sentence of KRS 395.610 raises the specific problem that you have in mind. That sentence reads:
"No account of a fiduciary except of corporate fiduciaries under the supervision of state or federal banking authorities shall be approved until there are exhibited to the court, for its examination, the security or securities shown in said account as being in the hands of the fiduciary, or the certificate of a bank having possession thereof or in which they have been deposited for safekeeping, and a certified bank statement showing the funds to the credit of the trust."
Your specific question is this:
"Does the quoted section of these two statutes refer to all fiduciaries in any capacity whatsoever, including administrators of estates. Or does this section of the statute refer bank to only guardian committees and trustees under a continuing trust. "
It is our opinion, upon considering the entire statute, that the provisions relating to a physical disclosure of the security or securities shown in the account refers to all fiduciaries, as specifically defined by KRS 395.001 [except corporate fiduciaries under supervision of state or federal banking authorities]. In that connection KRS 395.001 reads:
"The term 'fiduciary' as used in this chapter 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 district court, including executors, administrators, administrators with the will annexed, testamentary trustees, curators, guardians and committees."
In reading the entire statute, KRS 395.610, we find that the exception to the annual accounting period, which exception covers guardians, committees and trustees under continuing trust, relates to the periodicity of the accounting, that is, the regular intervals of accounting of the fiduciary as mentioned in the statute. Thus this last sentence in the statute pertaining to securities shown in the fiduciary's account was clearly intended to refer to any fiduciary as defined in KRS 395.001, regardless of the accounting scheme. Of course, in the construction of any statute the whole of it and the purpose of all of it must be considered.
Henry v. Commonwealth, 312 Ky. 491, 228 S.W.2d 32 (1950).
The word "trust" is used several times in KRS 395.610 with the same meaning. In the opening sentence, the statute contains the language "every fiduciary must render an account of the execution of his trust to the court." (Emphasis added). In the last sentence of the statute, it contains the language about a "certified bank statement showing the funds to the credit of the trust." (Emphasis added). In the middle of the statute, stating the exception to annual accounting, the statute contains the words "guardians, committees and trustees under continuing trust. " (Emphasis added). In all three cases the word "trust" is used in its general sense: It concerns something committeed or entrusted to one to be used or cared for in the interest of another. See Webster's Seventh New Collegiate Dictionary, p.p. 952-953.
We would like to point out, however, that under S.B. 260, enacted in the 1978 Session, KRS 395.610 was amended to exclude testamentary trustees from the periodic accounting provisions. S.B 260, in addition, makes it clear that every fiduciary as defined in KRS 395.001, other than a testamentary trustee, is mandated to follow the periodic annual accounting [except for guardians, committees and trustees under continuing trust] . Senate Bill 260 also requires that testamentary trustees file accounts pursuant to judicial proceedings under KRS 386.675, but no accounting to the court under KRS 395.610 is required.
You mention KRS 25.175. Actually, that statute was repealed by Acts of 1976 (Extraordinary Session) Chapter 14, Section 491, effective January 2, 1978. However, that statute was reenacted verbatim in 1976 (Extraordinary Session) Chapter 14, Section 370, effective January 2, 1978, and is now shown as KRS 395.610.