[WSBAPT] Question about Revocable Living Trust

Tue Feb 28 07:14:49 PST 2023

Hi John,

I probably would not agree to do the model trust amendment workaround I suggested in my elaboration upon Phil’s quite correct observations (which had been met with crickets 😉).

But the fact remains that an amendment to a trust can be in handwriting and fully enforceable like any other amendment. And give away millions of dollars and acres of real property.

This thread has discussed two very distinct things:

(1) separate writings incorporated by reference pursuant to statutory authority; and

(2) handwritten trust amendments that meet the subject trust’s requirements for amending it.

Item (1) above is controlled by RCW 11.12.260, which refers to a "will or a trust." A separate writing cannot successfully be incorporated by reference if it disposes of property other than tangible personal property as defined in that provision. I have not seen anyone suggest otherwise on this thread; if I did so, I retract and apologize.

Item (2) above is NOT controlled by that provision. An amendment is not a separate writing incorporated by reference. An amendment’s validity is controlled by other law applicable to trusts.

As inadvisable and unwise as it may be to setup a blank model trust amendment with language and signature blocks customized to a client's trust, it is nonetheless the case that it cannot simply be deemed invalid and unenforceable if done properly just because RCW 11.12.260 addresses incorporation by reference in wills and trusts.

Nobody would argue that the threshold validity of a trust amendment (or codicil, for that matter) is controlled by RCW 11.12.260.

That analytical distinction is all that Phil Jones and I addressed in our emails responding to the inquiry and the resulting blanket statements that something like what was contemplated simply could not be done. We both view that as incorrect for the reasons above.

And as much as I might never do my “template trust amendment workaround” myself, I can nonetheless admit that I have at least three clients I can think of who could implement that if they wanted to — and it would probably work perfectly (so meticulous are they! 😂). But I also have hundreds more clients that would lose their minds trying to do that and could likely destroy their entire estate plan with their scribblings.

Which is why I’d never suggest the idea, even though I can acknowledge that it would be perfectly legal to accomplish.

All my very best, Josh

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of John J. Sullivan <sullaw at comcast.net>
Sent: Monday, February 27, 2023 11:09 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Question about Revocable Living Trust

I agree with those who weighed in saying the Separate Writing cannot dispose of cash or dirt, but only TPP. I question the wisdom of trying to cobble such a thing, and would not try to, if for no other reason than to cover my own rear. In my experience it would be too easy to modify a “separate writing” fraudulently. I’ve had family members walk away with RLTs and had to do restatements to fix the mess.

An RLT does not require the formalities of a Will, but is still a testamentary instrument. The Separate Writing is limited to contain risk.

John J. Sullivan

Sent from my iPad

On Feb 27, 2023, at 10:52 AM, Jeff at bellanddavispllc.com wrote:

You should look at RCW 11.12.260, and in particular, subparagraph (4), the definition of “tangible personal property.”  You cannot use a separate writing to disburse either currency or bank/financial accounts.

Jeff Davis

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Heather de Vrieze
Sent: Monday, February 27, 2023 10:47 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Question about Revocable Living Trust

Candace,

I’m interested to see if anyone has a contrary opinion, as I have had similar requests over the years, and have always advised clients that this is not a workable solution.

Heather

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Candace Wilkerson
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To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Question about Revocable Living Trust

Hi Listmates,

I’m curious how to deal with this one.  We have a client who wants to leave their trust assets (not just small items of personal property, but financial accounts, etc.) strictly according to a separate Letter of Instructions.  This includes both specific gifts and the residuary trust estate.  Most, if not all, of these beneficiaries will be charitable organizations.

I have told the client that I think the distributions will need to be laid out specifically in the trust language itself, because a separate writing probably will not be legally binding.  I’ve also told them that, of course, TOD accounts can be designated for a specific charitable beneficiary and not transferred into the trust itself.  But the client wants the separate Letter of Instructions because it’s more flexible than changing the terms of the trust when they want to add or delete a charitable beneficiary.

Am I incorrect in believing that such a separate writing will not be considered legally binding?  Or is it enough to say in the trust that, after the Settlor’s death, “the trust estate will be distributed according to the Letter of Instructions dated ____ addressed to ______”?

Thanks for your thoughts.

Best,
Candace Wilkerson

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