General Information/Reporting Due to Beneficiaries
Permissible Distributee: a beneficiary who is currently eligible to receive distributions of trust income or principal, whether the distribution is mandatory or discretionary
Qualified Beneficiary: a beneficiary who, on the date that such beneficiary’s qualification is determined:
- Is a permissible distributee,
- Would be a permissible distributee if the interests of the other permissible distributees terminated on that date, or
- Would be a permissible distributee if the trust terminated on that date
Trustee’s must provide annually to each permissible distributee:
- Itemized statement of current receipts and disbursements of principal and income, and
- Upon beneficiary request, an itemized statement of all property held in the trust
Trustee’s must keep all qualified beneficiaries “reasonably informed” about administration of the trust and of the material facts necessary for them to protect their interests
The Trustee must promptly respond to beneficiary request for information related to:
- Administration of the trust, and
- Terms of trust (trustee is deemed to have satisfied request by providing a copy of the entire trust agreement)
A Trustee is not required to provide information to a beneficiary other than the trustor’s spouse (or domestic partner) if:
- Spouse has capacity,
- Spouse is the only permissible distributee of the trust, and
- All of the other qualified beneficiaries are the descendants of the trustor AND the trustor’s spouse (one step-child and everyone gets information)
- Either in the trust or in a separate writing, the trustor can waive these requirements
- While the trustor of a revocable trust is living, no beneficiary other than the trustor is entitled to receive any information under this section, but the trustor may waive or modify this requirement
Trustee’s Duty to Notify Beneficiaries of New Trustee
Unless waived or modified by the trustor in the trust or a separate writing, a new trustee must notify qualified beneficiaries within 60 days of accepting trusteeship of the following:
- Existence of the trust,
- Identity of the trustor or trustors,
- Trustee’s name, address, and telephone number, and
- The right to request “such information as is reasonably necessary to enable the notified person to enforce his or her rights under the trust”
Notice applies to irrevocable trusts created after December 31, 2011, and revocable trusts that become irrevocable after December 31, 2011.
A Trustee is not required to provide notice to a beneficiary other than the trustor’s spouse (or domestic partner) if:
- Spouse has capacity,
- Spouse is the only permissible distributee of the trust, and
- ll of the other qualified beneficiaries are the descendants of the trustor AND the trustor’s spouse (one step-child and everyone get notice)
While the trustor of a revocable trust is living, no beneficiary other than the trustor is entitled to receive notice
Either in the trust or in a separate writing, the trustor can waive these requirements
Trustee Report that Triggers Running of Statute of Limitations
A beneficiary (note that this is ANY beneficiary, and not limited to permissible distributees and qualified beneficiaries) may not file suit for breach of trust more than three years after a report was delivered “adequately disclosed the existence of a potential claim…” so that the beneficiary “knows or should have known” about the claim
A report that includes the following information (if relevant for the reporting period) will trigger statute of limitations:
- A statement of receipts and disbursements of principal and income that have occurred during the accounting period;
- A statement of the assets and liabilities of the trust and their values at the beginning and end of the period;
- The trustee’s compensation for the period;
- The agents hired by the trustee, their relationship to the trustee, if any, and their compensation, for the period;
- Disclosure of any pledge, mortgage, option, or lease of trust property, or other agreement affecting trust property binding for a period of five years or more that was granted or entered into during the accounting period;
- Disclosure of all transactions during the period that are equivalent to one of the types of transactions described in RCW 11.98.078 or otherwise could have been affected by a conflict between the trustee’s fiduciary and personal interests;
- A statement that the recipient of the account information may petition the superior court pursuant to chapter 11.106 RCW to obtain review of the statement and of acts of the trustee disclosed in the statement; and
- A statement that claims against the trustee for breach of trust may not be made after the expiration of three years from the date the beneficiary receives the statement
Disclaimers: This material is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this material does not create an attorney-client relationship.