Last month, Washington’s Supreme Court issued a decision emphasizing just how serious our state’s laws are about allowing personal representatives anointed with nonintervention powers in a Will to proceed with the administration of Estates without court involvement. In the case, In re Rathbone, a beneficiary challenged a personal representative’s interpretation of a Will in a probate in which the personal representative had been granted nonintervention powers by the court.
Kathryn Rathbone had three sons. In her Will, she provided for a specific bequest of real property to one of her sons but also granted an option to purchase the same property from her Estate for $350,000 to another son, who she had also appointed to serve as personal representative of her Estate. The Will provided no instruction regarding the distribution of the $350,000 from the sale of the property. The son who had been granted the option to purchase the property exercised the option, purchased the property, and distributed the $350,000 from the sale of the property as part of the residue of the Estate. The Will provided that the Estate’s residue was to be distributed in equal shares to Ms. Rathbone’s three sons.
The son who would have received the property pursuant to the specific bequest filed a request for an Estate accounting under RCW 11.68.110 and then filed a petition under the Trust and Estate Dispute Resolution Act (TEDRA) requesting that the court interpret the Will to require that the proceeds from the sale of the property be distributed to him, and not with the Estate residue. Both the trial court and the Court of Appeals ruled in favor of the objecting beneficiary, overriding the personal representative’s interpretation of the Will in regards to how to distribute the proceeds of the property’s sale. The Supreme Court reversed, ruling that TEDRA “did not give the trial court authority to construe the will in this case” and that the authority invoked under nonintervention statutes is “limited to resolving issues provided under each statute.”
There are a few fairly unique elements to this case that may limit the court’s decision to the facts in the case. First, Ms. Rathbone’s Will contained language conferring on the personal representation “authority to construe this Will …” Second, Ms. Rathbone’s Will included a broad “no contest” provision, not only disinheriting any beneficiary who contests the Will, but further stating, “I specifically desire that my son, Glen, and his children, do not contest, challenge, or harass my Personal Representative and Trustee.” It was Glen who brought the challenge disputing the personal representative’s interpretation of the Will.
The Supreme Court’s bottom line in its decision was that “TEDRA does not independently give trial courts authority when there is another statute through which a beneficiary must invoke authority.” Perhaps most significantly, the court noted that while RCW 11.68.070 “could provide a court with some authority to intervene to ensure a personal representative complies with his or her fiduciary duties, that is not the assertion here.” RCW 11.68.070 provides a process for removing a personal representative who has been granted nonintervention powers if it is demonstrated the personal representative engaged in fraud or mismanagement of the estate. Here, the trial court found no misconduct on the part of the personal representative and it appears that Glen’s attorney did not argue that the personal representative had engaged in any misconduct.
What are the lessons to be learned from this decision? First, specific bequests should be written with care. The dispute here may have been avoided had Ms. Rathbone’s Will specified how to distribute the proceeds from the sale of the property. Second, TEDRA is not a magic wand for invoking the jurisdiction of the courts in a nonintervention probate; there must be a statutory basis for the court to step in once nonintervention powers are granted. And, third, when a beneficiary believes the court should override a personal representative’s actions, the basis for the requested action must reside in Washington law, such as a petition for removal of the personal representative for failing to fulfill his or her fiduciary duties.
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