[WSBAPT] resignation of Trustee without discharge

[Paul Grant]

Eric,

I don't think accounting has to be approved per 041.  Notice and 30 days
does the trick unless one of two things:  1. agreement from all parties
entitled to notice or 2. someone files a court petition.  I would say that
a pure reading of the statute is that a discharge is not a release of
liability; 039(5)(b) indicates that the actions of the predecessor can
still be brought by the new trustee or a beneficiary.  I do not see that
the 30 days sunsets that subsection of possible action, rather, it is just
giving a time of the predecessor's liability ending for his/her acts. I
would even suggest that an agreement of Trustee change does not end the
liability unless specifically agreed upon - the agreement just ends or
closes the date by which the predecessor's fiduciary duty would be deemed
to end (agreement or 30 days).

For liability purposes, statute of limitations RCW 4.16.370 says look at
RCW 11.96A.070 (love bouncing balls) which clearly gives a three year SOL
against a trustee.  So, I would read the entire statutes working together
as the 30 days ending the Trustee's duties and the 3 years ends liability.

All of this would make sense... who can give an accounting of a trust and
find all potential errors or do a forensic accounting within 30 days.  That
would greatly benefit the Trustee and not many trusts or laws will do that
- the law is protecting the beneficiary with the fiduciary duties, not the
Trustee.  So, I think your interpretation of requiring an accounting to
bring a close to fiduciary liability may be reading too much into the
statute, or you may be adding that the accounting is a step not in statute
(that I see at least).  I have not done any case research so if you know of
something out there then let us know!

11.106 appears to only be applicable to trusts created out of wills and not
accounting done with a revocable or irrev trust, so pending the creation
instrument that statute may apply as well.

Just my reading.  Hope you are well.


Paul H. Grant - JD, LL.M

Planning with Purpose, Inc
Lynnwood, WA 98036
425-939-9948
www.planningwithpurposeinc.com

Estate Planning. Business Planning. Wealth Succession.

On Wed, Jun 7, 2017 at 4:15 PM, Eric Nelsen <Eric at sayrelawoffices.com>
wrote:

> I am unclear on meaning of the word "discharge" in Ch. 11.98 RCW when it
> comes to Trustees. See RCW 11.98.029, .039, .041
> <http://app.leg.wa.gov/RCW/default.aspx?cite=11.98&full=true#11.98.029>.
>
>
>
> The statutes appear to indicate that a resignation is only effective upon
> discharge. But I have generally understood "discharge" to mean not only
> that the person has resigned, but that their prior accounting has been
> approved and there can be no further action against them for liability.
> Possibly I have given the term too much weight. If a Trustee is
> "discharged," is the Trustee still subject to liability for mishandling
> funds during their tenure?
>
>
>
> I just need a misbehaving Trustee to resign in favor of a successor named
> in the instrument, so the successor can do the necessary investigation.
> Obviously I do not want to discharge the resigning Trustee's liability…
>
>
>
> Sincerely,
>
>
>
> Eric
>
>
>
> Eric C. Nelsen
>
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>
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>
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