[WSBAPT] Trustee Reports

[Joshua McKarcher]

Jacob, I have not researched this at all, fortunately never having had to. But my "practitioner's intuition" would start here: the TAA provisions are conclusive as to what they provide notice of (inventory, receipts, expenses, judgment calls evident within those categories, distributions, etc.); and the separate SOL on breach of fiduciary duty are (it would seem to me) the class of claims that would not have been evident or discoverable in the "TAA process." I could be very wrong, but this is how I would think of it.

So, if a trustee did everything by the book and obtained the TAA order, they have little to no risk of being sued successfully just because they spent $100,000 of well-documented lawyers' fees that were plainly disclosed to the complainant in the TAA process.

But if it turns out that nothing in the TAA process would have disclosed that $40,000 of the $100,000 in fees was spent to help the trustee hide the fact that s/he had conducted transactions that cost the trust a lot of money, and someone discovers the $40,000 fact only at year 2 of 3, then their claim for breach of fiduciary duty should not be barred for THAT breach. Not that it should open up the entire inventory, accounting, etc. that was approved in the TAA process for rehashing; but that anything that was not disclosed or was undiscoverable that amounts to breach of fiduciary duty was not cutoff by simply following the TAA process.

I guess I'm thinking if you started there, I'd be surprised if the answer isn't somewhere in the . . . well, emanations of the penumbras of my narrative. Which means it's probably just about as helpful as that.

Hope it helps spark a lead, though! Best, Josh

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Jacob Menashe
Sent: Friday, January 6, 2023 9:57 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Trustee Reports

I am writing about something I have struggled with before, and maybe even queried about on this listserve. I am trying to better understand the squaring of 1) the Trustee Accounting Act (TAA), and particularly RCW 11.106.080, which says if you follow the TAA process and obtain a decree that decree is final, conclusive, and binding upon all parties, subject only to the right of appeal under RCW 11.106.090 with 2) RCW 11.96A.070(1)(b)(viii) which says a beneficiary has three years from proper notification to bring a breach of fiduciary duty against the trustee. Considering, too, Anderson v. Dussault, do folks understand this to mean that even if you give the right notice and obtain a decree under the TAA, the beneficiary still has three years to file a claim for breach of fiduciary duty? (For this question, I am assuming the beneficiary is competent.)

Sincerely,

Jacob

Jacob H. Menashe
Hickman Menashe, PS
4211 Alderwood Mall Blvd., Suite 204
Lynnwood, WA 98036
(425) 744-5658 phone
(425) 744-6078 fax
Satellite Office in Bellevue
www.hickmanmenashe.com

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