[WSBAPT] Laches - Trustee

[Eric Nelsen]

I think T's desired remedy is to obtain a title interest for the SNT under a constructive trust theory. Is there a S/L for constructive trust? I am not sure.

Alternatively, could H claim adverse possession for 7 years under (a) color of title plus (b) paid all taxes, plus (c) actual occupancy and possession, (d) in good faith, under RCW 7.28.070<http://app.leg.wa.gov/RCW/default.aspx?cite=7.28&full=true#7.28.070>?

Another thought--trace the purchase funds. If I understand the facts right, when the house was sold in 2008, the SNT got $100K and the remainder of the money went to H. When H bought Blackacre, did T actually disburse some money from the SNT's account at time of purchase, or is T arguing that some of the money that was already in H's hands from the 2008 sale actually belonged to the SNT? If the latter, there is an additional barrier that T may not be able to prove that the funds actually belonged to the SNT and/or missed the S/L for money-had-and-received.

I tend to agree that the CPA isn't relevant at this point, since it appears H handled matters in accordance with the Will instead, back in 2008. A lot could depend on exactly how that "trust checking account" was set up. Do the parties just call it that, or is it genuinely set up as belonging to the SNT, with T as Trustee?

Another idea--argue that to the extent SNT funds were used in 2009, they amounted to a distribution for H's benefit, and not a purchase by the SNT. That would seem to match up with the documentation.

On the SNT--if this has just been a bank account in name of the trust for the last 7 years, then counterclaim against T for breach of fiduciary duties--failure to invest, failure to diligently pursue the purposes of the trust, etc., etc.  Damages to H for T's failure to provide any benefit to him could be good leverage.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040





From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Josh Grant
Sent: Monday, May 16, 2016 10:14 AM
To: wsbar trust
Subject: [WSBAPT] Laches - Trustee

Client (H) was PR of spouse’s will which was filed for probate in 2008, It contained a special needs trust for benefit of H with remainder to T .  Trustee (T) is a daughter of W.
W’s undivided 1/2 of home was deeded to testamentary  trust.
Home sold in 2008 for over $200,000.  T and H signed deed.
About $100,000 of proceeds was placed in a trust checking account.

2009 H then purchased Blackacre.  T claims funds were used from trust account for part of purchase.
Title to blackacre was vested in H’s name only.

T now claims, 7 years later,  that the Trust should be entitled to a portion of blackacre.

T never did any annual reports, accountings, never distributed any funds to the beneficiary who was H for life, and did not insist that the Trust be on the title to Blackacre, notwithstanding funds from Trust were used to purchase it.

A CPA agreement existed at W’s death.
T says that under Norris v. Norris 95 Wn 2d 124,  1980, that H can not now claim that the CPA prevails over the Will because he accepted a benefit under the will.

Is there a laches or a statue of limitations defense which can be used here?

The other thought is that by never giving any benefits to H, T is now hard pressed to claim that the trust was properly set up, and H really didn’t get any benefit from the trust and therefore even under Norris, the CPA should prevail.

Thoughts?

Josh




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