AN ACT Relating to the uniform statutory will act; amending RCW 11.97.010 and 11.97.900; and adding a new chapter to Title 11 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON: UNIFORM STATUTORY WILL ACT

NEW SECTION. Sec. 1. DEFINITIONS. In this chapter:

(1) "Child" means, except as otherwise modified by this subsection, any child of the natural parent whose relationship is involved. An adopted individual is the child of the adopting parents and not of the natural parents except that an individual adopted by the spouse of a natural parent is also the child of either natural parent. An individual born out of wedlock is not the child of the father unless the individual is openly and notoriously so treated by the the father. The term does not include any individual who is only a stepchild, a foster child, a grandchild, or any more remote descendant.

(2) "Issue" of an individual means all lineal descendants of all generations, with the status of a child at each generation being determined by the definition of child contained in this chapter.

(3) "Personal representative" includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same functions relating to the estate of a decedent under the law governing their status.

(4) "Property" means an interest, present or future, legal or equitable, vested or contingent, in real or personal property.

(5) "Representation" means the estate is divided into as many shares as there are surviving heirs in the nearest degree of kinship and deceased individuals in the same degree who left issue who survive the decedent, each surviving heir in the nearest degree receiving one share and the share of each deceased individual in the same degree being divided among issue of that individual in the same manner.

(6) "Statutory-will estate" means the entire testamentary estate, except as the will otherwise provides.

(7) "Surviving spouse" means the individual to whom the testator was married at the time of death except a spouse from whom the testator was then separated under a decree of separation, whether or not final, or written separation agreement. An individual separated from the testator whose marriage to the testator continues in effect under the law of this state solely because an existing judgment of divorce or annulment of the marriage is not recognized as valid in this state is not the testator's surviving spouse under this chapter. An individual whose marriage to the testator at the time of death is not recognized in this state solely because an existing judgment of divorce or annulment of a prior marriage of either or both of them is not recognized as valid in this state is the testator's surviving spouse under this chapter.

(8) "Testamentary estate" includes every interest in property subject to disposition or appointed by a will of the decedent.

(9) "Testator's residence" means one or more properties normally used at the time of the testator's death by the testator or the surviving spouse as a residence for any part of the year. If the property used as a residence is a unit in a cooperative, it includes the lease or certificate of possession and the shares of stock and other obligations relating to that unit in the cooperative. If the property is used in part for commercial, agricultural, or other business purpose, the testator's residence is an area not exceeding three acres, which includes the structure used in whole or in part as a residence and structures normally used by the testator in connection with the dwelling and excludes structures and areas outside the dwelling primarily used for commercial, agricultural, or other business purpose.

(10) "Trustee" includes an original, additional, or successor trustee, whether or not appointed or confirmed by the court.

NEW SECTION. Sec. 2. MAKING STATUTORY WILL. Any individual having capacity to make a will under the laws of this state may make a statutory will under this chapter. The will must be executed in a manner recognized as valid under the laws of this state.

NEW SECTION. Sec. 3. INCORPORATION BY REFERENCE. (a) A will may incorporate by reference the provisions of this chapter in whole or in part and with modifications and additions as the will provides. To the extent that an express provision of a will conflicts with provisions of this chapter, the express provision of the will governs.

(b) A provision that all or part of the testator's testamentary estate is to be disposed of in accordance with the Washington Uniform Statutory Will Act incorporates by reference provisions of this chapter in effect on the date the will is executed.

(c) An incorporation by reference of the provisions of this chapter may be in the following or a substantially similar form:

"Except as otherwise provided in this will, I direct that my testamentary estate be disposed of in accordance with the Washington Uniform Statutory Will Act."

NEW SECTION. Sec. 4. SHARES UNDER STATUTORY WILL. The statutory-will estate passes as provided in sections 5 through 9 of this act.

NEW SECTION. Sec. 5. SHARE OF THE SPOUSE. (a) The share of the surviving spouse is:

(1) If there is no surviving child, the entire statutory-will estate;

(2) If there is a surviving child:

(i) The testator's residence and tangible personal property, except items held primarily for investment or for commercial, agricultural, or other business purpose, subject to any lien or encumbrance thereon;

(ii) The greater of three hundred thousand dollars, or one-half of the balance of the statutory-will estate; and

(iii) Subject to subsection (b) of this section, an interest in the remaining portion of the statutory-will estate, including any property which would pass under subsection (a)(2)(i) or (a)(2)(ii) of this section but disclaimed by the surviving spouse, in a trust upon the terms set forth in section 6 of this act.

(b) If the personal representative, other than the surviving spouse, determines that the trust under section 6 of this act would be uneconomical, the entire statutory-will estate shall pass to the surviving spouse.

NEW SECTION. Sec. 6. TERMS OF TRUST FOR SPOUSE AND ISSUE. Property held in trust under section 5(a)(iii) of this act is held upon the following terms:

(1) During the life of the surviving spouse the entire net income must be paid to or for the benefit of the surviving spouse in quarter annual or more frequent installments. If any unproductive property is held in the trust, the surviving spouse at any time by written instrument to the trustee may compel conversion of the unproductive property to productive property.

(2) During the life of the surviving spouse, the trustee at any time may pay to or for the benefit of the surviving spouse and issue of the testator amounts of the principal the trustee deems advisable, giving reasonable consideration to other resources available to the distributee, for the individual's needs for health, education, support, or maintenance; but payments of principal to or for the benefit of issue may not in the aggregate exceed a one-half share of the principal. Primary consideration must be given to the needs of the surviving spouse and the children who are under the age of twenty-three years. The trustee may rely in good faith on a written statement furnished by any beneficiary. The discretion to pay principal to or for the benefit of any individual includes the discretion after that individual's death to pay expenses incurred prior to the individual's death and reasonable funeral and burial expenses. If the trustee determines that continuation of the trust becomes uneconomical, the trustee may terminate the trust by distribution of principal to the surviving spouse. Principal that in the exercise of the trustee's discretion is paid to or used for the benefit of any issue may be charged against any share of income or principal thereafter existing for that issue or for any ancestor or descendant of that issue, if the trustee upon equitable considerations so determines, but may not be charged against the share of the surviving spouse. If the surviving spouse or any issue is serving as trustee, the trustee's discretion provided in this subsection is not exercisable in favor of that trustee except as necessary for the trustee's needs for health, education, support, or maintenance nor is the trustee's discretion exercisable in favor of the trustee's estate, or creditors, or the creditors of the trustee's estate.

(3) Subject to sections 8 and 9 of this act, the principal must be paid on the death of the surviving spouse to the children of the testator in equal shares if all of the children are then living, otherwise to the then living issue of the testator by representation or, if no issue of the testator is then living, to any individuals who would be entitled to receive the estate as if the property were located in this state and the testator had then died intestate domiciled in this state under the law as it then exists in the proportions so determined.

NEW SECTION. Sec. 7. SHARES OF HEIRS WHEN NO SURVIVING SPOUSE. (a) If there is no surviving spouse, the statutory-will estate passes, subject to sections 8 and 9 of this act, as follows:

(1) If there is surviving issue, in equal shares to the children of the testator if all of them survive, otherwise to the surviving issue of the testator by representation;

(2) If there is no surviving issue, to any individuals entitled to receive the estate as if the property were located in this state and the testator had died intestate domiciled in this state in the proportions so determined.

(b) Unless the personal representative determines that a trust would be uneconomical, property to which section 8 or 9 of this act applies shall be distributed to the trustee. If the personal representative determines that a trust would be uneconomical, the property shall pass under subsection (a) of this section free of trust. The discretion provided in this subsection to the personal representative is not exercisable by any of the testator's issue serving as personal representative.

NEW SECTION. Sec. 8. FAMILY TRUST IF CHILD UNDER SPECIFIED AGE. (a) If property is distributable under section 6(3) or 7 of this act to any child of the testator who is under the age specified in the will, or, if the will does not specify an age, under the age of twenty-three years, all shares distributable to issue of the testator shall be held in a family trust under this section.

(b) Until no living child is under the age determined under subsection (a) of this section, the trustee shall pay the income and principal of the family trust to or for the benefit or account of one or more of the issue of the testator in amounts as the trustee deems advisable for their needs for health, education, support, or maintenance. Income not so paid may be added to principal.

(c) The trustee at any time in its discretion may distribute to a beneficiary the share, in whole or in part, of the family trust to which the distributee would be entitled if the trust then terminated. If the whole of a share has been distributed under this subsection, the trustee thereafter shall not make any further distribution of income or principal to that distributee or issue of that distributee.

(d) The family trust terminates when no living child is under the age determined under subsection (a) of this section or the trustee in its discretion determines that continuation of the trust is uneconomical.

(e) Subject to subsection (c) of this section and section 9 of this act, the property in the family trust must be distributed upon termination to the issue of the testator, or to their successors in interest, in proportion to the shares determined under section 7 of this act. In determining the amount to be distributed to any distributee, the trustee shall charge the share of that distributee with any partial distribution made under subsection (c) of this section and may charge, in its discretion, the share of that distributee with distributions under subsection (b) of this section to or for the benefit or account of the distributee, or issue or ancestor of the distributee. If any issue whose share is held in trust under this section dies before the complete distribution of the share, the property to which the issue would have been entitled if living must be distributed as the issue may have appointed by will specifically referring to this power of appointment. To the extent property is not effectively or fully appointed it must be distributed to the estate of that deceased issue.

(f) If any issue is serving as trustee, the discretion of the trustee under this section is not exercisable, except as necessary for that individual's needs for health, education, support, or maintenance, in favor of that individual or that individual's estate, or creditors, or the creditors of that individual's estate.

NEW SECTION. Sec. 9. EFFECT OF DISABILITY AT DISTRIBUTION. (a) If property becomes distributable by a personal representative or trustee to an individual under the age specified in the will or, if the will does not specify an age, under the age of twenty-three years, or to an individual whom the personal representative or trustee determines cannot effectively manage or apply the property by reason of mental illness, mental deficiency, physical illness or disability, chronic use of drugs, chronic intoxication, or other cause: (1) The personal representative or trustee, as to either principal or income, may distribute part or all of the property to the distributee directly or by deposit or investment in the distributee's name, or for the distributee's account; (2) the trustee may apply the property for the distributee's benefit; or (3) the personal representative may distribute to the trustee or the trustee may retain all or any part of the property in trust for the distributee and thereafter at any time the trustee may distribute part or all of the principal or income of the trust to or for the benefit or account of the distributee.

(b) Unless terminated earlier, a trust under subsection (a)(3) of this section terminates upon the attainment of the required age, removal of the disability, or death of the distributee. The trustee shall distribute the remaining trust property to the distributee or to the guardian, conservator, or personal representative of the distributee's estate, as the case may be.

NEW SECTION. Sec. 10. POWERS OF APPOINTMENT. (a) A will incorporating by reference the terms of this chapter does not exercise a power of appointment unless: (1) The will complies with any conditions imposed on the exercise of the power; (2) the appointment is within the scope of the power; and (3) the will expressly refers to the power or expresses an intent to exercise any power of appointment held by the testator.

(b) If a power of appointment is exercised as provided in subsection (a) of this section, the appointed property passes as part of the statutory-will estate unless the will provides otherwise.

NEW SECTION. Sec. 11. SURVIVAL. An individual who does not survive the testator by thirty days is treated as if the individual predeceased the testator.

NEW SECTION. Sec. 12. APPOINTMENT OF PERSONAL REPRESENTATIVE AND TRUSTEE. (a) The person named in the will as personal representative or trustee is entitled to serve, if qualified, as personal representative or trustee.

(b) If no qualified person is named in the will as personal representative, or the named person is incapacitated, unwilling to serve, or dead, and a qualified alternate is not named in the will, priority for appointment as personal representative is determined by the law of the state of decedent's domicile at death.

(c) If no qualified person is named in the will as trustee, or the named person is incapacitated, unwilling to serve, or is dead, and a qualified alternate is not named in the will, the personal representative may appoint, without court approval, a qualified person, including a person serving as personal representative, to serve as trustee.

(d) If a personal representative or trustee resigns, is removed, becomes incapacitated, or dies, the surviving spouse, or if there is no surviving spouse or the surviving spouse is unable or unwilling to act, a majority of the adult children of the testator, may appoint a qualified successor personal representative or trustee.

(e) In all other cases, personal representatives and trustees shall be appointed by the court.

NEW SECTION. Sec. 13. POWERS. (a) Except as expressly provided in the will, the personal representative has all powers conferred on personal representatives by law including those powers conferred by chapter 11.48 RCW.

(b) Except as expressly provided in the will, the trustee has all powers conferred on trustees by law including those powers conferred by Title 11 RCW.

(c) Except as otherwise provided by the terms of the will, the personal representative or trustee shall observe the standards in dealing with the estate that would be observed by a prudent person dealing with the property of another, and if the personal representative or trustee has special skills or is named personal representative or trustee on the basis of representation of special skills or expertise, the person is under a duty to use those skills. Only property which qualifies for the estate tax marital deduction under the internal revenue code, as amended, may be allocated to the surviving spouse or to a trust established under section 6 of this act.

NEW SECTION. Sec. 14. BOND OR SURETY. A personal representative or trustee under this chapter shall serve without giving bond or surety unless the testator by will, or the court upon the application of any person interested in the estate, provides otherwise.

NEW SECTION. Sec. 15. SHORT TITLE. This chapter may be cited as the Washington statutory will act.

NEW SECTION. Sec. 16. UNIFORMITY OF APPLICATION AND CONSTRUCTION. This chapter shall be applied and construed to effectuate its general purpose to make uniform the law with respect to the subject of this chapter among states enacting it.

Sec. 17. Section 2, chapter 124, Laws of 1959 as amended by section 64, chapter 149, Laws of 1984 and RCW 11.97.010 are each amended to read as follows:

The trustor of a trust may by the provisions of the trust relieve the trustee from any or all of the duties, restrictions, and liabilities which would otherwise be imposed by chapters 11.95, 11.98, 11.100, and 11.104 RCW ((~~and~~)), RCW 11.106.020, and section 13 of this 1985 act, or may alter or deny any or all of the privileges and powers conferred by those provisions; or may add duties, restrictions, liabilities, privileges, or powers to those imposed or granted by those provisions. If any specific provision of those chapters is in conflict with the provisions of a trust, the provisions of the trust control whether or not specific reference is made in the trust to any of those chapters. In no event may a trustee be relieved of the duty to act in good faith and with honest judgment.

Sec. 18. Section 65, chapter 149, Laws of 1984 and RCW 11.97.900 are each amended to read as follows:

This chapter applies to the provisions of chapters 11.95, 11.98, 11.100, and 11.104 RCW ((~~and~~)), to RCW 11.106.020, and to section 13 of this 1985 act.

NEW SECTION. Sec. 19. Sections 1 through 16 of this act shall constitute a new chapter in Title 11 RCW.