[WSBAPT] Trustee Duty of Loyalty

[Jacob]

I am thinking of a situation where a trustee may use trust funds to buy a car for a beneficiary, with the kicker being that the car she is purchasing is the trustee’s. I am thinking about a very fair (to the beneficiary) price. But it’s still self-dealing—the trustee is both the seller and the buyer. My questions are two-fold.

First, RCW 11.98.078 (Trustee duty of loyalty) talks about a “beneficiary” consenting to the transaction. My question whether this means just the (under RCW 11.98.002) current, permissible beneficiary consenting or would it also mean the qualified beneficiary? In other words, is the current beneficiary’s consent enough?

Second, is it just a bad idea and the trustee should just buy a car for the beneficiary from a third party, even if the trustee’s car would be a better deal for the beneficiary?

Thanks!

Jacob

Jacob H. Menashe
Hickman Menashe, PS
4211 Alderwood Mall Blvd., Suite 204
Lynnwood, WA 98036
(425) 744-5658 phone (ext. 102)
(425) 744-6078 fax
Satellite Office in Bellevue
www.hickmanmenashe.com

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