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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">My thoughts:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">I agree it's important that X and Y have no issue. Anti-lapse statute is inapplicable here because even if X and Y are related to the decedent, they have no
issue to take by right of representation, so X and Y can be treated as if unrelated to the decedent for your purposes.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">I think this should be governed more by case law handling testamentary trusts, and not irrevocable inter vivos trusts. I think the outcome differs. A testamentary
trust does not demonstrate an irrevocable alienation of interest from the grantor as an inter vivos trust would. Instead, a testamentary trust is a gift of certain equitable rights to the beneficiary as to certain property given by the decedent to the trustee.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">By that perspective, I would say that a testamentary trust that fails to expressly provide for termination at beneficiary's death implies a reversionary interest
in the <u>decedent's</u> testamentary residue heirs. The lack of a remainder clause in the trust means that that the
<u>trust</u> fails to fully dispose of decedent's property, but the law generally assumes that a
<u>Will</u> (that the trust is a part of) is intended to dispose of all the decedent's property. So the residue clause, I would argue, receives the remainder interest of the Trust after death of its only beneficiary.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">If the Will has no residue clause, then the reversionary interest goes to the decedent's intestate heirs at law, by the same logic. The Will can't be construed
to cover all property, but also can't be interpreted to give the entire property interest to the trust beneficiary. By its nature, the trust does not give full rights in the assets to the beneficiary; the beneficiary's interest is inchoate and equitable only.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Then the next tricky part: At what point is the reversionary interest vested--at death of the decedent, or at termination of the trust? I had to go around and
around about this in a case a while back, that resulted in me opening a probate for someone who had been dead for decades but who had just acquired a property interest (wish I could go into details). The vesting question is tricky and in Washington the only
good case I could find on the question is <u>Button</u>, which you mention (79 Wn.2d 849 (1971)), and it punts the issue in favor of resolving on the sole basis of holding that the antilapse statute applies to RLTs the same as it does to Wills. I went to secondary
authority, and here is what I concluded in the law regarding trusts:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><b><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Failure of trust</span></b><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">. The states are split,
the question being whether, when a settlor creates a trust, the <u>settlor</u> is considered to have retained a reverter (and therefore heirs are determined at settlor's date of death), or all rights to the property passed to the
<u>trustee</u> (and therefore heirs are determined at trigger event causing failure of the trust). If all rights pass to the trustee, then the decedent's heirs living at the time of failure of the trust take by virtue of a resulting trust, rather than by inheritance/descent.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Cases stating that heirs are determined at time of failure of the trust include
<u>Butler v. Citizens & Southern Nat. Bank</u>, 211 Ga. 414, 86 S.E.2d 520 (1955);
<u>Fiduciary Trust Co. v. State St. Bank & Trust Co.</u>, 360 Mass. 652, 277 N.E.2d 120 (1971);
<u>Dennis v. Omaha Nat. Bank</u>, 153 Neb. 865, 46 N.W.2d 606, 27 A.L.R.2d 674 (1951).
<u>See also</u> <u>Polsky v. Continental Nat. Bank</u>, 110 F.2d 50 (CA8 Neb); <u>
Shirk v. Lee</u>, 3 F.2d 256 (CA4 Md); <u>Blount v. Walker</u>, 31 S.C. 13, 9 S.E. 804.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">I didn't keep the references to cases going the other way (determining heirs at date of decedent's death) as it wasn't applicable to my case. But for what it's
worth, the main source I used was 23 Am.Jur.2d Descent & Distribution (2002), so you might check there for more information. See especially section 96.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D">SAYRE LAW OFFICES, PLLC<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D">Seattle WA 98144-3909<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D">phone 206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D">fax 206-625-9040<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-family:"Calibri","sans-serif";color:red">Please Note that We Have Moved.</span></b><b><span style="font-family:"Calibri","sans-serif";color:#1F497D">
</span></b><span style="font-family:"Calibri","sans-serif";color:#1F497D">We have moved our Seattle office to Mount Baker Ridge (a small commercial community just above the I-90 tunnel).
<b>Our new address is 1417 31st Avenue South, Seattle WA 98144. </b>All other contact information remains the same.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Jacob Menashe<br>
<b>Sent:</b> Wednesday, August 23, 2017 2:18 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv<br>
<b>Subject:</b> [WSBAPT] Distribution at Death of Beneficiary of Trust Created Under a Will<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">My associate and I have been going round and round about what happens if a beneficiary of an irrevocable trust, created in a decedent’s last will, passes away
and there is no one left as a remainder beneficiary. In the situation we are imagining, X beneficiary’s trust at X’s death goes to Y’s trust (also created under the same will) and vice-versa. So let’s say X passes away first and everything is in Y’s trust.
Then Y passes away. And neither X nor Y have any descendants (which I think is an important fact). Plus, there were no other beneficiaries in the decedent’s will; only the trusts for X and Y.)
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">So, where will the trust go? To the initial decedent’s heirs (not descendants, though, as X and Y were her only children) or will it go at Y’s death to Y’s
heirs? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">We have been round and round about this, and have looked at RCW 11.12.120 and RCW 11.12.110, and a couple interesting cases, Button v. Old National Bank and
Kvande v. Olsen. We think if we had a revocable living trust, where the beneficiary passed away before the grantor, then there would be a good argument we are looking at the decedent’s heirs, not Y’s. But here we have the intervening chunk of time, where the
beneficiary of the trust created in the decedent’s will passed away after the decedent.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">In summary, then, my query is: Absent anywhere else to go, will the trust pass at Y’s death to the decedent’s heirs or to the beneficiary Y’s heirs?
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Thanks for any thoughts on this. We are fairly stuck and I hope someone can get us unstuck.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Sincerely,
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Jacob<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Jacob H. Menashe<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Hickman Menashe, PS<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">4211 Alderwood Mall Blvd., Suite 202<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Lynnwood, WA 98036<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">(425) 744-5658 phone<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">(425) 744-6078 fax<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Satellite Office in Bellevue<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><a href="www.hickmanmenashe.com"><span style="color:#1F497D">www.hickmanmenashe.com</span></a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;color:#1F497D"><o:p> </o:p></span></p>
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