[WSBAPT] Secret Trust?

[Heather deVrieze]

I have drafted a couple trusts for clients with similar concerns, including an incentive and a penalty. The trust provided that the beneficiary upon graduation would receive the income from the trust as long as s/he was gainfully employed, in an internship, fellowship or similar, and upon reaching a particular age made distributions of principal equal to a multiplier (1x, 2x, 5x etc.) of W-2 (or schedule C, or equivalent) earned income. The goal with one of them was that if child chose to be a teacher, they could still be well off, but got nothing if they were totally unemployed and not working in any way. One of them had a 1 year continuation of prior year distribution in the event of daughter having a child and staying home to care for it, and both had medical or disability exceptions, but totally in Trustee’s control.

There are other ways to encourage a beneficiary to remain productive members of the community than keeping the trust a secret, which I don’t think you can really do under current Washington law.

Heather

Heather S. de Vrieze
Attorney-at-Law
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Kristina DeVore
Sent: Sunday, January 17, 2016 2:56 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Secret Trust?

Listmates:

I have a client who would like to leave a portion of his estate to his son in trust and would like to have the trust be completely secret for a period of time after his death.  He is concerned that a large looming inheritance might create an incentive for the son to no longer be a productive member of society and instead just wait out the time period until he would receive his inheritance.  I have read RCW 11.98.072 and the waiver in that section seems to imply that a trustor can waive the requirements in 11.98.072(2) and/or (3) but does not imply that a trustor can waive the requirements of 11.98.072(1) to keep a “qualified beneficiary reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests”.  However, RCW 11.97.010 states that a “trustor of a trust may…relieve the trustee from any or all of the duties, restrictions, and liabilities which would otherwise be imposed by chapters  11.98….”

Does this mean that a trustor can create a testamentary trust that is kept secret from the beneficiary after the trustor dies by waiving the duties of 11.98.072 (1) (2) and (3)?

Thanks in advance for any thoughts you can share.

Kristina


Kristina S. DeVore | Attorney & Counselor at Law
KRISTINA DEVORE LAW FIRM, pllc | 300 W. 15th Street, Suite 305 | Vancouver, WA  98660
Phone: (360) 695-0535 | Fax: (360) 737-4154 | kristina at devore-law.com<mailto:kristina at devore-law.com>




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