[WSBAPT] nonprofit org as trustee?

[Philip N. Jones]

Some community foundations (or other nonprofits) will not want to serve as a trustee of a trust, because that role triggers all kinds of reporting/regulation/etc.  Instead, they would want to hold the assets in a fund that is part of their overall foundation.  By doing so, their reporting requirements are few, or at least are not much more than what they have been doing for years.
The other way of saying this is to suggest that you get a firm (in writing) commitment from your proposed trustee that they will take on this responsibility of serving as a trustee.
At a minimum, nominate a backup if they decline.
Phil Jones
Portland, OR


Philip N. Jones
Duffy Kekel LLP
900 S.W. Fifth Ave. Suite 2500
Portland, OR 97204
pjones at duffykekel.com<mailto:pjones at duffykekel.com>
(503) 226-1371 - office
(503) 853-1482 - cell
(503) 226-3574 - fax

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Kerry Richards
Sent: Tuesday, July 26, 2022 5:03 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] nonprofit org as trustee?

Sharon:
Have your clients look into the Seattle Foundation.
Kerry A. Richards

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Sent: Tuesday, July 26, 2022 4:01:16 PM
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Subject: [WSBAPT] nonprofit org as trustee?


Hi, friends -



Clients, a married couple, want to create a testamentary trust to receive assets when the second of them dies. The trust would hold assets intended for charitable purposes. They want to name a not-for-profit organization to serve as trustee, rather than a professional fiduciary (such as one of the Washington trust banks), to avoid having to pay trustee fees. Instead, they want the organization to receive a small portion of the trust assets each year as a donation in return for serving as trustee.



Has anyone seen this done before, and are there issues we should be aware of? I'm trying to figure out if this is a terrific idea or if it will create more pitfalls than it avoids. For example, the organization they are considering is located in Washington, D.C.   The trustee would be in charge of a trust subject to Washington law, but would not be a Washington entity. Does that create a problem?



Thanks for any guidance you can provide.



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>

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