[WSBAPT] Pooled Account for Multiple Trusts

[Josh Grant]

Why not have everyone sign a TEDRA agreement putting it into one trust and providing that it is OK to rent to _____ etc.?

From: Mark Higgins 
Sent: Monday, January 05, 2015 3:48 PM
To: WSBA Probate & Trust Listserv 
Subject: Re: [WSBAPT] Pooled Account for Multiple Trusts

Tara--I assume in these trusts the trustee has certain invasion rights or duties if a trust beneficiary needs more from the trust than just income.  If that is true it would not appear the home is a good investment as it may turn out that one trust needs to invade principal and sell the house for one beneficiary while another​ beneficiary doesn't want the house sold.  The same trustee would have conflicting duties for different beneficiaries.  Not good.  In addition, the situation you describe where the rent barely carries the house, indicates that there would be no net income for the trust beneficiaries.  With this investment it sounds like the trustee would be preferring remaindermen over the current life beneficiaries.  Again, not good.
Mark

On Mon, Jan 5, 2015 at 11:57 AM, Tara <pugetsoundlaw at gmail.com> wrote:

  Mother passed away leaving a Last Will that provided for testamentary trusts for her three adult children.  The trusts all last for the lifetime of each child and then passes to each child’s descendants.  The trustee is the same individual for all three trusts.  The only trust asset is the mother’s residence.  The family plans to keep the house and rent it out to a grandchild at a rate sufficient to cover expenses and upkeep, maybe turning into a rent-to-own situation, a common generational practice in this family.  The wrinkle is that the Will very explicitly states repeatedly that each trust is to be placed in and held as a separate trust for each child, rather than allowing for a common trust with separate shares for each child.



  I’m trying to puzzle out a convenient way for the trustee of these three separate trusts to manage the receipt of a single monthly rental payment and the payment of expenses for one property.  Three separate bank accounts for each trust seems unduly cumbersome.  I think that the more straightforward and streamlined the process, then the better the trustee will be able to manage the property, account for his activities, and comply with his duties.



  Is there a way for a bank to setup a pooled account for the three trusts with the trusts being tenants-in-common, maybe similar to how we handle IOLTA accounts, especially if everyone agrees and signs off in writing a TEDRA-like fashion?  Any ideas for setup that will be smooth for the trustee?  Suggestions?  Thanks in advance.



  Tara M. Roberts

  Puget Sound Law

  roberts at pugetsoundlaw.com



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-- 

Mark T. Higgins
Mark T. Higgins, P.C.
P.O. Box 57
Darrington, WA 98241
206-491-2420


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