[WSBAPT] interest of beneficiary of RLT after settlor dies

[Eric Nelsen]

If I can rephrase the question to make sure I understand it: A Trustee is also beneficiary of a Trust that became irrevocable when the Trustor died. Distribution is supposed to happen but has not happened yet. If the Trustee dies, can the Trustee's Will direct disposition of his undistributed beneficial interest in the Trust?



Assuming that is the question, I think the answer is yes. I think it is true in general for all beneficial interest in the Trust, since the death of Trustor triggered a right to distribution: If a beneficiary has survived the Trustor, then her/his interest has vested. If the beneficiary then dies, that vested beneficial interest is part of the beneficiary's estate, and can pass under the beneficiary's Will or by intestacy if there is no Will.



The main quandary will be for the successor Trustee of the Trust, who needs to know definitively who is supposed to get the deceased beneficiary's share of the Trust. If the deceased beneficiary left a Will, then I think it needs to be probated so there is a PR to distribute to, or at the very least an adjudication of testacy needs to be entered per latter part of RCW 11.20.020(1)<https://app.leg.wa.gov/RCW/default.aspx?cite=11.20&full=true#11.20.020>, so the Trustee gets the protection afforded under the final paragraph of RCW 11.28.340<https://app.leg.wa.gov/RCW/default.aspx?cite=11.28.340> if the Trustee is going to distribute directly to the deceased beneficiary's beneficiaries.



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



-----Original Message-----
From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Doug Owens
Sent: Friday, October 18, 2019 8:59 AM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] interest of beneficiary of RLT after settlor dies



Dear Listmates, I have an interesting question.  A client is a beneficiary of an RLT as to which the settlor has died, and a sibling, also a beneficiary, is the trustee.  The trust has two pieces of real property that are the assets and specifies that the trustee beneficiary is to receive a distribution of one of the houses and the other house is to be distributed to the other beneficiaries when the settlor dies.  The settlor died three years ago, the trustee beneficiary lives in the house that was to belong to that beneficiary but has made no distributions.  My client wants to know whether, if the trustee beneficiary dies without having made a distribution, can the trustee beneficiary’s will pass the trustee beneficiary’s interest in the trust to the remaining siblings?  Thanks for  your thoughts.  Yours truly, Doug Owens



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