[WSBAPT] Trust Property Not Distributed Per Terms, Now Beneficiary has died....

[Nicholas Pleasants]

My take is that the right of D/PB is vested to D/PB’s estate and heirs, and should not pass under the Trust (unless the Trust had language that allowed D/PB to leave it in, but it sounds like that was not the case). D/PB’s Estate would have claim against Trustee for failure to distribute. There are some statute of limitations issues, but breach would run from discovery, and there is a pretty strong argument if it was just discovered by D/PB’s heirs.
I’ve crossed this issue in several probates that stretched on for years, and during the pendency of probate, a beneficiary of the probate died. I’ve always understood that the share vested to the beneficiary, and now beneficiary’s estate must also be probated.
Best,
Nick

Nicholas Pleasants
Owner

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From: <wsbapt-bounces at lists.wsbarppt.com> on behalf of Brent Williams-Ruth <brent at williams-ruthlaw.com>
Reply-To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com>
Date: Tuesday, November 2, 2021 at 10:59 AM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com>
Subject: [WSBAPT] Trust Property Not Distributed Per Terms, Now Beneficiary has died....

Greetings List -

New to me situation.

Decedent/Primary Beneficiary (D/PB) dies at 50 years old. The parents of the D/PB set up a family trust decades ago with a term that said the Trustee SHALL distribute, free of trust, once the D/PB attains the age of 40.

That Trust distribution and dissolution of the Trust never happened and D/PB died with assets still in the family trust.

Can/should the Trustee make a distribution now to the D/PB estate for distribution under the D/PB Will OR because the funds were left in the Trust, the contingent beneficiaries who were to take if "D/PB dies before the complete distribution of their trust share.."

One the one hand, I say it should pass by terms of the Trust, but then I wonder if the beneficiary of the D/PB estate would have actionable claim against the Trustee because they failed in their duty to comply with the terms of the trust and distribute free of trust - so those assets would have been in the D/PB's estate if they did their duty.

Appreciate thoughts and input on this.

Thank you!

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

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