Serving as the trustee of a trust for family or friends is a gracious and generous act. Most who serve do so out of love, gratitude, and a feeling of duty. But… it can also be a lonely and difficult role and many who act as non-professional trustees have one or perhaps two trusts they work with and limited sources of information about changes to their responsibilities.
You’ve probably heard that Washington’s trust law changed and went into effect on January 1, 2012. Most of the changes are somewhat administrative and reflect changes in technology, the fact that trusts are becoming more mobile, that occasionally trusts need to be reformed, and the clarification of a beneficiary’s right to know about their interest in a trust. Of all the changes made to the law, the following are the ones that could affect your responsibilities and liability as a trustee the most:
- For new irrevocable trusts (created after December 31, 2011 or for trusts that became irrevocable after that date), there is a new statutory duty to notify beneficiaries that cannot be waived by the grantor. This means that even if a grantor directs a trustee not to inform the beneficiaries of the existence of the trust, the trustee is still required by state law to do so.
- The law now clearly spells out the duty of the trustee to keep all interested persons (current and future) reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. This will require providing statements to remainder beneficiaries and a copy of the trust document if requested.
- The law also provides that these documents should also contain a disclosure that the person of interest in the trust may petition the court to review the provided information and acts of the trustee, and that claims against the trustee for breach of trust may not be made after the expiration of three years from the date of their receipt. It is important to note that this statute of limitations is available only if the trustee has made an “adequate disclosure” about the administration of the trust. Without adequate disclosure, the statute of limitations for asserting claims against the trustees for breach of trust is three years after the later of the termination of the beneficiary’s interest in the trust; the death, resignation, or removal of the trustee; or the termination of the trust – any of which could be a very long period of time.
Please know that this is only a brief summary of some of the key provisions in the new trust law. You may want to consult with the trust’s legal counsel for advice as to how the new trust law affects you and the trust you represent specifically.
If these new trustee duties sound daunting, there are professional or corporate trustees who can take on much of the administrative burden. Laird Norton Wealth Management is a full service trust company with resources to help you meet your additional trustee duties or act as a successor trustee should you no longer want the responsibility. If you have any questions about the revised legislation or would like more information about our trust services, we encourage you to give us a call at 206-464-5100.
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