[WSBAPT] Regular Trustee Statements to Remainder Beneficiaries??

[JOHN J SULLIVAN]

Listmates:


QOD: A professional trustee of an irrevocable credit shelter trust established following the death of the first spouse-grantor has suddenly taken the position that it is required to send monthly statements of the trust's investment accounts to the remainder beneficiaries, who are all the adult children of either the deceased or surviving spouse-grantor. The surviving spouse-grantor is the sole "permissible distributee." No distributions to the children remainder beneficiaries are authorized while the surviving spouse is alive (and competent). 


Is the trustee required or even authorized to share such confidential information with the remainder beneficiaries?


As I read the applicable statutes, RCW 11.106.020 requires the trustee to provide an annual report itemizing receipts and distributions to all "permissible distributees." A "permissible distributee under RCW 11.98.002 is only someone currently eligible to receive mandatory or discretionary distributions.

RCW 11.98.072(1) requires a trustee to keep "qualified beneficiaries" reasonably informed about the administration of the trust and to respond to requests for information from them. Subsection (2) contains the requirement of the "trust notice" letters that have become standard practice since the statute came into effect in 2011. But ... subsection (3) contains an exception to the requirements of both (1) and (2) that appears to apply to my client's circumstances. It provides that the trustee may not be required to provide any information described in subsection (1) or(2) to 

"any beneficiary of a trust other than the trustor's spouse or domestic partner if:


(a) Such spouse or domestic partner has capacity;

(b) Such spouse or domestic partner is the only permissible distributee of the trust; and

(c) All of the other qualified beneficiaries of the trust are the descendants of the trustor and the trustor's spouse or domestic partner."

Am I missing something? Has there been a recent change in the law??


Thanks in advance for your help.


Best regards,

John J. Sullivan mailto:dlyons at lyonslawoffices.com ,

Attorney

Lyons | Sullivan

10655 NE 4th Street, Suite 704

Bellevue, WA 98004

425·451·2400 tel 425-451-7385 faxhttp://www.dljslaw.com/

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