[WSBAPT] trust queston

[Stuart Scarff]

If the Beneficiary if amenable to a 3rd party controlling the purse strings, you could draft an Irrevocable Trust and the parties sign a Nonjudicial Agreement under TEDRA agreeing to transfer the Beneficiary's share into the Trust with an agreed upon Trustee and successor Trustees. 

Stuart Scarff, Esq.
3035 Island Crest Way, Suite 201
Mercer Island, WA  98040
206.236.1500
206.905.5912 (fax)
www.scarfflaw.com
      
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-----Original Message-----
From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Jennifer L White
Sent: Monday, May 24, 2021 12:28 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] trust queston

I agree with Nicholas and his analysis. 
Another alternative - sometimes those types of beneficiaries do understand their own frailties and do not want to blow their inheritance. A lower cost alternative if there is agreement is for the beneficiary to designate a POA (perhaps one of the other siblings, preferably a responsible one). The POA then manages the gift for the beneficiary and they work out a distribution scheme that gives $$, but meters it out. Obviously, this doesn't work if the beneficiary is hellbent on getting their hands on the $$ and blowing through it.  That scenario doesn't protect against creditors either, but it can work for some situations. 

Jennifer L. White, Esq.                              


jen at appletreelaw.com
PO Box 11037
Yakima, WA 98909
509.225.9813

-----Original Message-----
From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Nicholas Pleasants
Sent: Monday, May 24, 2021 12:05 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] trust queston

I don't think that RCW 11.98.008(1) gives the PR unilateral authority to create a trust over a beneficiary's share. That statute is just explaining that a trust can be created by a Will. A trust for someone with borderline capacity is really something that should be explicitly stated in the Will. The PR needs to be careful about the beneficiary's due process rights.
In my Wills and Trusts, we have a definition section that defines incapacity as anytime two physicians opine that the beneficiary cannot manage his affairs. But to prove capacity, the PR can require the beneficiary to produce two letters from physicians that he can manage his affairs, and if the beneficiary refuses to produce two letters of capacity, then the PR can treat them as incapacitated.
If you are stuck here, the best course of action may be to Petition the court for appointment of a guardian ad litem. The GAL probably cannot force the beneficiary to agree to a trust, but could go for guardianship to protect the funds from being wasted.
Assuming there are sufficient assets involved, the GAL could be the best bet to provide protection for the PR and preserve the inheritance for the beneficiary.
Best,
Nick

Nicholas Pleasants
Owner
 
Pleasants Law Firm, P.S.
2300 130th Ave NE, Suite A-101
Bellevue, WA 98005-1755
(425) 615-7070 tel/fax
nick at pleasantslaw.com
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On 5/23/21, 8:01 PM, "wsbapt-bounces at lists.wsbarppt.com on behalf of Cindy Zetts" <wsbapt-bounces at lists.wsbarppt.com on behalf of czlawgirl at earthlink.net> wrote:

    Hello --

    I have not had this issue come up for me, so I'm looking for some help in a probate with a beneficiary who has a substance-abuse problem.  The PR wants to create a trust to distribute the beneficiary's share of the estate to prevent the beneficiary from going on a bender and spending the money on drugs. The Will specifically allows PR to create a trust for a minor or incapacitated beneficiary, but the beneficiary in question fits in neither of those categories at this point.  It seems to me that RCW 11.98.008(1) should allow the PR to create a trust for the benefit of the beneficiary in question. PR wants to provide minimal $$ to the beneficiary until the beneficiary has been clean for an extended period.

    Anyone available to help this PR or to answer a few questions from me so I can help?

    Thank you,
    Cindy Zetts
    Cynthia Zetts Law, PLLC
    Affordable estate planning, mobile service 
    253-720-6446


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