[WSBAPT] Trustee Powers To Loan Trust Principal to Themselves as Beneficiary

[Eden Rubenstein Toner]

Bo, what does the trust document say?

If such a loan was not permitted under the document or under statute, you could bring a breach of fiduciary duty lawsuit, assuming that the actual damages would make it worthwhile.

 

Eden Rubenstein Toner

Attorney at Law

1600-B SW Dash Point Road, #163

Federal Way, WA 98023

phone 206-953-4485

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Boaz Weintraub
Sent: Wednesday, January 18, 2017 2:29 PM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Trustee Powers To Loan Trust Principal to Themselves as Beneficiary

 

Dear Listmates: 

 

During marriage, a spouse acting as sole trustee of her father's testamentary (credit shelter) trust loaned herself and husband trust substantial monies at a fair market interest rate for a 4 year term. The spouse/trustee is also a beneficiary of the trust. The only other beneficiary (the mother) is incapacitated, and the spouse has power of attorney over her financial matters.   




RCW 11.98.070 describes the powers of a trustee. Subsection (13) states in part ...."except that no trustee who is a beneficiary of a trust may participate in decisions regarding loans to such beneficiary from the trust and then only to the extent of the loan..."

 

The issue is whether the spouse was prevented from loaning herself and her husband the trust monies under this or any other applicable statute or Wa. law. If not, what would be the remedy/legal consequence? 

 

Thank you in advance for any input. 

 

-- 

Boaz "Bo" Weintraub  | JD, LL.M. 

Weintraub Law Office, PLLC 

T  <tel:%28425%29%20374-4045> (425) 374-4045 |  F  <tel:%28425%29%20274-7019> (425) 274-7019 

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Thank you.

 

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