[WSBAPT] caregiver child scenario

[Marcus Fry]

Sharon:
I think if you break this down, your client has an unjust enrichment claim that she could pursue against mom for care services, as such at a minimum the assets of the revocable living trust would be exposed to satisfy the claim.  As such, the current trustee of the RLT could enter into an agreement to satisfy this claim for past services and also contract for future services.  It is unclear from your facts whether the irrevocable trust is a first party self-settled trust that would not have any creditor protection under Washington law, but if it is, the same would hold true.  I also think that the trustee of the irrevocable trust (even if it has creditor protection) may want to ensure that its beneficiary is not sued, and therefore, could be willing to settle the claim for past work and enter into a contract for future work.  Of course, that trustee of the irrev. trust is going to want remainder beneficiaries to sign off on this action.  Therefore, you wouldn't have to worry about distributing principal and income outside the terms of the trust, but rather do it for the benefit of the beneficiary to protect the beneficiary.

Keep in mind the rules for Medicaid and requirement of contemporaneous payment of a family caregiver if Medicaid is anywhere on the horizon, but your post suggests that is not the case.

I agree that you cannot represent mom.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
P.O. Box 1689
Yakima, Washington  98907
Telephone:  (509) 248-7220
Facsimile:  (509) 575-1883

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Sharon Rutberg
Sent: Thursday, November 12, 2020 4:18 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] caregiver child scenario

Hello, list mates -

My client is one of three adult children whose elderly mother has needed substantial help with care and arranging care for her. My client gave up a highly compensated professional job and also depleted savings to care for and arrange care for her mother. Upon mom's death, the three children are to receive an equal share of mon's sizable estate, according to the terms of two trusts of which mom is the beneficiary - one revocable and one irrevocable. The other two children, both professionals who have been able to keep working, agree this is not a fair outcome.

There is a significant question whether mom has capacity to amend her revocable trust to provide for a larger share to the caregiver child at mom's death, and the trust forbids her agent under a DPOA from making such an amendment. I have concluded that I should not also represent mom in amending her trust to change the beneficiary structure, due to the potential for a conflict of interest, and that another attorney would need to consult with mom and determine if she has capacity. In an effort to avoid bringing in other attorneys, we have also looked at whether a trustee of the irrevocable trust could distribute principal from that trust to the caregiver child, if the transaction were properly documented. And of course there is the option of having the trusts pay the caregiver child some amount of taxable compensation.

I have explored these questions with a couple of other attorneys so far. My question is this: Have you represented a family member in a similar situation, and what solution(s) did the family come up with? I think this must not be an uncommon situation.

Best,
Sharon

Sharon C. Rutberg, Attorney at Law
Salmon Bay Law Group, PLLC
1734 NW Market St.
Seattle, WA 98107
206-735-3177, ext. 2
sharon at salmonbaylaw.com<mailto:sharon at salmonbaylaw.com>
Website: www.salmonbaylaw.com<http://www.salmonbaylaw.com/>
Washington State Bar #47055

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