Hopefully, most people who agree to take on the duties of a trustee seek to be a trusted trustee. What does that mean? It means that the trustee works cooperatively with the attorney representing the trust, develops an understanding of the terms of the trust, develops an understanding of the additional requirements of a trustee set forth by Washington law, and then works diligently to do the job to the best of their ability.
What happens if that’s not the case? Unfortunately, sometimes trustees accept this fiduciary role, and then take the position of, “Awesome. I’m in charge. This is what I’m going to do.” Please keep in mind that a trustee often does have some discretion in some aspects of how the trust is administered, so long as both the trust’s terms and Washington law allow for discretion on those particular aspects of trust management. For example, RCW 11.98.070 sets forth a list of discretionary powers related to a trust’s financial management, but caveats this authority in requiring that the trustee exercise his or her discretion “in accordance with the standards provided by law.”
Trustees sometimes get into trouble when they ignore the express terms of the trust. For example, a trust often requires a trustee to divide trust funds into various buckets (sub-trusts or other types of trusts). And a trust often requires a trustee to distribute funds to trust beneficiaries pursuant to certain specified benchmarks, such as when the beneficiaries reach a certain age. The trustee cannot simply ignore these express requirements of the trust without facing penalties.
Trustees can also get into trouble due to a failure to communicate. Even if the trustee is performing his or her fiduciary duties correctly, nonetheless, RCW 11.98.072(1) requires, “a] trustee [to] keep all qualified beneficiaries of a trust reasonably informed about the administration of the trust and of the material facts necessary for them to protect their interests. Unless unreasonable under the circumstances, a trustee must promptly respond to any beneficiary’s request for information related to the administration of the trust.”
A trustee must always be mindful that, as a fiduciary, RCW 11.98.078(1) imposes a strict duty to “administer the trust solely in the interests of the beneficiaries.” Trust beneficiaries have a right to petition the court to remove a trustee if the trust provisions are not being followed. Also, in certain instances, RCW 11.98.085 allows for a trustee to be liable for damages for a breach of trust.
Are you a trustee who wants to do the job right, and be a trusted trustee? Or are you a beneficiary who is concerned that the trustee may not fully be meeting his or her requirements? If so, please let us know. We’d be happy to help.
This post is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting with an attorney.