## Facts

- On August 25, 2004, Edward R. Johnson and Catherine A. Moreland Johnson created the Johnson Family Trust, an inter vivos trust, and served as the initial co-trustees.
- During the settlors’ joint lifetimes, the trust was administered for their benefit.
- The trust provided that, after Edward’s death, Catherine would receive the trust’s income for life.
- The trust further provided that, upon Catherine’s death, the remaining trust property would pass to Edward’s son, James Michael Johnson.
- The trust instrument included language stating that the trustee was “not required to provide any accounting of the trust.”
- Edward died, and Catherine became the sole trustee and the current income beneficiary.
- James, named to receive the remainder at Catherine’s death, requested information about the trust’s administration and sought an accounting from Catherine.
- Catherine refused to provide an accounting, relying on the trust’s no-accounting language.
- James filed a petition in the Circuit Court for Calvert County seeking court assumption of jurisdiction over the trust and an order requiring Catherine to provide an accounting.
- The circuit court determined that James had a sufficient beneficial interest and ordered Catherine to provide an accounting (with a deadline set by the court).
- Catherine appealed to the Court of Special Appeals of Maryland.

## Issues

1. Whether James, as a remainder beneficiary, had a sufficient interest in the trust to be entitled to an accounting from the trustee.
2. Whether the trust’s provision stating that the trustee was not required to provide any accounting barred a court from ordering an accounting at the request of a beneficiary.

## Decision

- The Court of Special Appeals of Maryland affirmed the circuit court’s order.
- The court held that James, as the named remainder beneficiary, had a beneficial interest that entitled him to seek an accounting.
- The court held that the trust’s no-accounting language did not prevent judicial relief requiring an accounting where a beneficiary seeks information to protect his interest.
- The court approved the circuit court’s exercise of equitable authority to supervise trust administration by requiring the trustee to report on the trust’s management and assets.

## Legal Principles

- A trustee is a fiduciary and owes duties to the trust’s beneficiaries, including duties related to proper administration and disclosure of information needed to protect beneficiary interests.
- A remainder beneficiary named to take trust property at the termination of a prior interest holds a recognized beneficial interest and may seek relief to monitor the trustee’s conduct.
- Courts of equity traditionally have authority to supervise trusts and may order a trustee to render an accounting when necessary to ensure faithful administration.
- Trust provisions that attempt to excuse a trustee from providing accountings are construed narrowly and do not bar a court from ordering an accounting where a beneficiary shows a legitimate need for information.
- A trustee cannot use trust language to operate free from judicial review where the beneficiary’s ability to protect his interest would otherwise be impaired.

## Conclusion

In *Johnson v. Johnson*, the Maryland intermediate appellate court affirmed an order requiring a trustee to provide a trust accounting to a remainder beneficiary, holding that the beneficiary had standing based on his remainder interest and that a clause stating the trustee need not provide any accounting did not stop a court of equity from compelling an accounting to safeguard the beneficiary’s interest.


Johnson v. Johnson, 967 A.2d 274 (2009)