[WSBAPT] Personal Rep powers, estate/trust assets.

[Rich McEntee]

Hello. 

The following is a cross post on another listserve. My apologies if you received this previously. 

I am hoping to get some feedback related to a will/codicil drafting issue. I was approached by a client who has an existing will. The will has provisions for a trust or two (depending upon the PR’s election of marital deduction for a portion of the assets.) which are for the benefit of the client’s spouse. The estate has approximately $4M in assets. Most of the assets are contained in a large stock portfolio that is managed by a local bank. At the termination of the trust(s), any assets that remain in or can be traced in the stock portfolio are to go to client’s grandchildren (client really wants stock to go in kind to grandchildren) the remaining assets that are not of the portfolio are to be distributed to client’s children. The clients spouse is named PR of the estate but not trustee of the trust(s). 

The client contacted me because she is concerned (only mildly) that upon her death and before distribution to trust, the spouse as PR might liquidate the stock portfolio and distribute cash to the trust. This would have the possible effect of disinheriting the grandchildren or preventing in kind distribution. The client’s other concern is that if the portfolio assets receive marital deduction status, then these will be expended first for surviving spouse needs. Again, this would have the effect of diminishing the assets to be distributed to the grandchildren. 

My question is: what type of drafting or language could be added such that the PR cannot liquidate the assets before distribution to the trust. The will in non-intervention with the typical broad powers given to the PR to mortgage, sell, exchange any asset of the estate. Would it be appropriate to limit the power to sell as to the particular stock portfolio? Would this impact the non-intervention status of the estate? Could there be a separate directive that the assets in the portfolio are not to be sold (unless there are no other assets available to pay expenses of the estate) and further that the PR is not to elect marital deduction with respect to those assets?  I am interested in your thoughts and whether folks have drafted in consideration of similar issues.

Thank you
Rich 

RICH McENTEE
McENTEE LAW OFFICE
3800 Bridgeport Way W, Ste A411
University Place, WA 98466
253.227.9894(m)
jrmcentee at gmail.com     
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