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Legal Memorandum: Judicial Accounting of a Trust

Issue: Under the ‘corporation doctrine’ in New York law, does each individual transaction in the management of a property and the operations of the limited partnership that owns it constitute a separate transaction that must be itemized and separately stated in the accounting (e.g., every rent payment, every commission payment)?  

Area of Law: Estate Planning & Probate
Keywords: Corporation doctrine; Judicial accounting of a trust; Degree of detail required to be disclosed
Jurisdiction: New York
Cited Cases: 37 N.Y.S.2d 883
Cited Statutes: Comp. Codes R. & Regs. § 207.52
Date: 07/01/2009

No New York cases were located in which the court discussed or even noted either a “corporation doctrine” or “corporate doctrine.”  A search for these terms in the New York cases database yielded no documents that included the term “corporate doctrine” and no relevant cases containing the term “corporation doctrine.”  Moreover, no secondary sources dealing with corporations or trusts were found that discussed a “corporation” or “corporate” doctrine.

Apart from the search for “corporation doctrine” references, research was undertaken to determine whether any New York cases or statutes specify the degree of detail required to be disclosed for a judicial accounting of a trust.   No cases were located directly on point but one case dealing with an analogous accounting—an executor’s accounting—might be relevant.   In In re Pritchard’s Estate, 36 N.Y.S.2d 997, 1001 (Surr. Ct.), aff’d, 265 A.D. 814, 37 N.Y.S.2d 883 (1st Dep’t 1942), the court stated:

There was no concealment of the operations of the business conducted by the executors.  The account and the agreement of March, 1935, sufficiently set them forth.  The agreement executed by the petitioner ratified the operations of the executors.  It is the ordinary practice in this court not to set forth in the account extended and detailed operations of either an individual business or of a corporation wholly owned or controlled by the decedent.  It is within the power of the beneficiary of the estate, in a case where the transactions are questioned, to seek an examination of the accounting […]

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