[WSBAPT] IRA beneficiary with restrictions

Thu Feb 1 13:46:04 PST 2024

I also agree with Diane and Phil, but I had this scenario twice. Not with an IRA but once with a testamentary trust and once with the dissolution of a church and gifts of liquidated assets to sister congregations per Board resolution of the dissolved congregation.

In each case, trouble.

In the first case, a reformed trust provision for "clarification" following years of litigation between many parties.  (No fewer than five related lawsuits).  The reformed provision to colleges/ universities was to restrict an endowment for woman-only scholarships. When the funds were offered, all of the colleges protested that the restrictions violated anti-discrimination laws.  The Washington AG worked with us to cut a distribution to the UW, but several private East Coast colleges refused to budge. Dilemma!  Conflict with the reformed language. Be careful what you wish for! Ten lawyers from four law firms involved in the litigation and nobody saw the issue.

In the second case, a clash of many strong personalities. Ultimately, the gifts were accompanied by precatory language but nothing binding to restrict the use of the gifts.

  Bruce Moen

________________________________
From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Philip N. Jones <pjones at duffykekel.com>
Sent: Thursday, February 1, 2024 12:46 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] IRA beneficiary with restrictions

I vote with Diane.
Phil Jones

Get Outlook for iOS<https://aka.ms/o0ukef>
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Diane J. Kiepe <DJKiepe at depdslaw.com>
Sent: Thursday, February 1, 2024 12:02:05 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] IRA beneficiary with restrictions

Ann,

While I have not encountered this problem, I believe there is no way that you can bind how the distribution will be used.  All the Personal Representative has authority over non probate assets that come into his/her possession.  The note below states that the charities were named directly.   Furthermore, while we all know are clients would never do anything wrong  (??), you are asking them to go off a written record based on a conversation they cannot confirm.  This is not fair to ask, in my opinion.  You could see that if it were allowed, a rouge PR may substitute their judgement for the decedents.

I might consider a letter, in writing, from the PR, saying what the intention/hopes of the funds were, based on a conversation with the decedent, as follows: (insert information).  Then you may add some language indicating the charity was specifically chosen and it would be a shame if a contribution was not used, at least in part, in a way the was consistent with the decedent’s wishes.

Good luck.

Diane J. Kiepe

Douglas Eden, P.S.

717 W. Sprague Ave., Suite 1500

Spokane, WA  99201

djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>

509-455-5300

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Anna Van Pelt
Sent: Wednesday, January 31, 2024 2:33 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com>
Subject: [WSBAPT] IRA beneficiary with restrictions

Good afternoon,

I would love your thoughts on this scenario.

Decedent designated several charities as beneficiaries of her IRA, and then gave oral instructions to her PR about how those funds should be restricted (for example, to be used as an endowment for scholarships for women). The only written record of the restrictions is the PR's notes. While funds have not yet been distributed, at least one charity has been, shall we say, less than enthusiastic about the restrictions coming from the PR's notes from the conversations with the decedent. Can the PR enforce the restrictions that they received orally from the decedent on the charities as a condition of receiving the funds, or are the restrictions unenforceable because they are not included in the beneficiary designation?

Thanks,

Anna

Van Pelt Law

(206) 635-7250

www.vanpeltlegal.com<http://www.vanpeltlegal.com/>

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