[WSBAPT] resignation of Trustee without discharge

Thu Jun 8 12:12:06 PDT 2017

Thanks Paul. I agree with your reading, which means I think that we may have "discharge" in a statute meaning different things in the context of Trustee versus PR. I can see some policy reasons for that, but I think I will have to parse the statutes more carefully to see if I can discern a distinction.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

Please Note that We Have Moved. We have moved our Seattle office to Mount Baker Ridge (a small commercial community just above the I-90 tunnel). Our new address is 1417 31st Avenue South, Seattle WA 98144. All other contact information remains the same.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Paul Grant
Sent: Wednesday, June 07, 2017 8:09 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] resignation of Trustee without discharge

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<http://www.planningwithpurposeinc.com>

Estate Planning. Business Planning. Wealth Succession.

On Wed, Jun 7, 2017 at 4:15 PM, Eric Nelsen <Eric at sayrelawoffices.com<mailto: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
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092<tel:(206)%20625-0092>
fax 206-625-9040<tel:(206)%20625-9040>

Please Note that We Have Moved. We have moved our Seattle office to Mount Baker Ridge (a small commercial community just above the I-90 tunnel). Our new address is 1417 31st Avenue South, Seattle WA 98144. All other contact information remains the same.

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