Washington Code 11.98.200 – Beneficiary trustee — Limitations on power
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Due to the inherent conflict of interest that exists between a trustee and a beneficiary of a trust, unless the terms of a trust refer specifically to RCW 11.98.200 through 11.98.240 and provide expressly to the contrary, the powers conferred upon a trustee who is a beneficiary of the trust, other than the trustor as a trustee, cannot be exercised by the trustee to make:
Terms Used In Washington Code 11.98.200
- Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract. Source: OCC
- Fiduciary: A trustee, executor, or administrator.
- Internal revenue code: means the United States internal revenue code of 1986, as amended or renumbered as of January 1, 2001. See Washington Code 11.02.005
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- person: may be construed to include the United States, this state, or any state or territory, or any public or private corporation or limited liability company, as well as an individual. See Washington Code 1.16.080
- Remainder: An interest in property that takes effect in the future at a specified time or after the occurrence of some event, such as the death of a life tenant.
- Trustee: means an original, added, or successor trustee and includes the state, or any agency thereof, when it is acting as the trustee of a trust to which chapter 11. See Washington Code 11.02.005
- Trustee: A person or institution holding and administering property in trust.
(1) Discretionary distributions of either principal or income to or for the benefit of the trustee, except to provide for the trustee’s health, education, maintenance, or support as described under section 2041 or 2514 of the Internal Revenue Code and the applicable regulations adopted under that section;
(2) Discretionary allocations of receipts or expenses as between principal and income, unless the trustee acts in a fiduciary capacity whereby the trustee has no power to enlarge or shift a beneficial interest except as an incidental consequence of the discharge of the trustee’s fiduciary duties; or
(3) Discretionary distributions of either principal or income to satisfy a legal obligation of the trustee.
A proscribed power under this section that is conferred upon two or more trustees may be exercised by the trustees that are not disqualified under this section. If there is no trustee qualified to exercise a power proscribed under this section, a person described in RCW 11.96A.080 who is entitled to seek judicial proceedings with respect to a trust may apply to a court of competent jurisdiction to appoint another trustee who would not be disqualified, and the power may be exercised by another trustee appointed by the court. Alternatively, another trustee who would not be disqualified may be appointed in accordance with the provisions of the trust instrument if the procedures are provided, or as set forth in RCW 11.98.039 as if the office of trustee were vacant, or by a nonjudicial dispute resolution agreement under RCW 11.96A.220.
NOTES:
Effective date—1999 c 42: See RCW 11.96A.902.
Application—1994 c 221: “The 1994 c 221 amendments to RCW 11.98.200(3) are remedial in nature and apply retroactively to July 25, 1993.” [ 1994 c 221 § 74.]
Effective dates—1994 c 221: See note following RCW 11.100.035.
Severability—1993 c 339: “If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.” [ 1993 c 339 § 14.]