1135-S AAS 04/04/01 S2403

1135-S AAS 04/04/01 S2403.1

SHB 1135 - S COMM AMD

By Committee on Judiciary

ADOPTED 04/04/01

Strike everything after the enacting clause and insert the following:

"NEW SECTION. Sec. 1. (1) An appointment of a principal's spouse as attorney in fact, including appointment as successor or co‑attorney in fact, under a power of attorney shall be revoked upon entry of a decree of dissolution or legal separation or declaration of invalidity of the marriage of the principal and the attorney in fact, unless the power of attorney or the decree provides otherwise. The effect of this revocation shall be as if the spouse resigned as attorney in fact, or if named as successor attorney in fact, renounced the appointment, as of the date of entry of the decree or declaration, and the power of attorney shall otherwise remain in effect with respect to appointments of other persons as attorney in fact for the principal or procedures prescribed in the power of attorney to appoint other persons, and any terms relating to service by persons as attorney in fact.

(2) This section applies to all decrees of dissolution and declarations of invalidity of marriage entered after the effective date of this act.

Sec. 2. RCW 11.94.040 and 1985 c 30 s 28 are each amended to read as follows:

(1) Any person acting without negligence and in good faith in reasonable reliance on a power of attorney shall not incur any liability ((~~thereby~~)).

(2) If the attorney in fact presents the power of attorney to a third person and requests the person to accept the attorney in fact's authority to act for the principal, and also presents to the person an acknowledged affidavit or declaration signed under penalty of perjury in the form designated in RCW 9A.72.085, signed and dated contemporaneously with presenting the power of attorney, which meets the requirements of subsection (3) of this section, and the person accepting the power of attorney has examined the power of attorney and confirmed the identity of the attorney in fact, then the person's reliance on the power of attorney is presumed to be without negligence and in good faith in reasonable reliance, which presumption may be rebutted by clear and convincing evidence that the person accepting the power of attorney knew or should have known that one or more of the material statements in the affidavit is untrue. It shall not be found that an organization knew or should have known of circumstances that would revoke or terminate the power of attorney or limit or modify the authority of the attorney in fact, unless the individual accepting the power of attorney on behalf of the organization knew or should have known of the circumstances.

(3) An affidavit presented pursuant to subsection (2) of this section shall state that:

(a) The person presenting himself or herself as the attorney in fact and signing the affidavit or declaration is the person so named in the power of attorney;

(b) If the attorney in fact is named in the power of attorney as a successor attorney in fact, the circumstances or conditions stated in the power of attorney that would cause that person to become the acting attorney in fact have occurred;

(d) To the best of the attorney in fact's knowledge, at the time the power of attorney was signed, the principal was competent to execute the document and was not under undue influence to sign the document;

(e) All events necessary to making the power of attorney effective have occurred;

(f) The attorney in fact does not have actual knowledge of the revocation, termination, limitation, or modification of the power of attorney or of the attorney in fact's authority;

(g) The attorney in fact does not have actual knowledge of the existence of other circumstances that would limit, modify, revoke, or terminate the power of attorney or the attorney in fact's authority to take the proposed action;

(h) If the attorney in fact was married to the principal at the time of execution of the power of attorney, then at the time of signing the affidavit or declaration, the marriage of the principal and the attorney in fact has not been dissolved or declared invalid; and

(i) The attorney in fact is acting in good faith pursuant to the authority given under the power of attorney.

(4) Unless the document contains a time limit, the length of time which has elapsed from its date of execution shall not prevent a party from reasonably relying on the document.

(5) Unless the document contains a requirement that it be filed for record to be effective, a person ((~~shall~~)) may place reasonable reliance on it regardless of whether it is so filed.

NEW SECTION. Sec. 3. (1) A person designated in section 4 of this act may file a petition requesting that the court:

(a) Determine whether the power of attorney is in effect or has terminated;

(b) Compel the attorney in fact to submit the attorney in fact's accounts or report the attorney in fact's acts as attorney in fact to the principal, the spouse of the principal, the guardian of the person or the estate of the principal, or to any other person required by the court in its discretion, if the attorney in fact has failed to submit an accounting or report within sixty days after written request from the person filing the petition, however, a government agency charged with the protection of vulnerable adults may file a petition upon the attorney in fact's refusal or failure to submit an accounting upon written request and shall not be required to wait sixty days;

(d) Order the attorney in fact to exercise or refrain from exercising authority in a power of attorney in a particular manner or for a particular purpose;

(e) Modify the authority of an attorney in fact under a power of attorney;

(f) Remove the attorney in fact on a determination by the court of both of the following:

(i) The attorney in fact has violated or is unfit to perform the fiduciary duties under the power of attorney; and

(ii) The removal of the attorney in fact is in the best interest of the principal;

(g) Approve the resignation of the attorney in fact and approve the final accountings of the resigning attorney in fact if submitted, subject to any orders the court determines are necessary to protect the principal's interests;

(h) Confirm the authority of a successor attorney in fact to act under a power of attorney upon removal or resignation of the previous attorney in fact;

(i) Compel a third person to honor the authority of an attorney in fact, provided that a third person may not be compelled to honor the agent's authority if the principal could not compel the third person to act in the same circumstances;

(j) Order the attorney in fact to furnish a bond in an amount the court determines to be appropriate.

(2) The petition shall contain a statement identifying the principal's known immediate family members, and any other persons known to petitioner to be interested in the principal's welfare or the principal's estate, stating which of said persons have an interest in the action requested in the petition and explaining the determination of who is interested in the petition.

NEW SECTION. Sec. 4. (1) A petition may be filed under section 3 of this act by any of the following persons:

(a) The attorney in fact;

(b) The principal;

(d) The guardian of the estate or person of the principal; or

(e) Any other interested person, as long as the person demonstrates to the court's satisfaction that the person is interested in the welfare of the principal and has a good faith belief that the court's intervention is necessary, and that the principal is incapacitated at the time of filing the petition or otherwise unable to protect his or her own interests.

(2) Notwithstanding section 1 of this act, the principal may specify in the power of attorney by name certain persons who shall have no authority to bring a petition under section 3 of this act with respect to the power of attorney. This provision is enforceable:

(a) If the person so named is not at the time of filing the petition the guardian of the principal;

(b) If at the time of signing the power of attorney the principal was represented by an attorney who advised the principal regarding the power of attorney and who signed a certificate at the time of execution of the power of attorney, stating that the attorney has advised the principal concerning his or her rights, the applicable law, and the effect and consequences of executing the power of attorney; or

(c) If (a) and (b) of this subsection do not apply, unless the person so named can establish that the principal was unduly influenced by another or under mistaken beliefs when excluding the person from the petition process, or unless the person named is a government agency charged with protection of vulnerable adults.

NEW SECTION. Sec. 5. In ruling on a petition filed under section 3 of this act and ordering any relief, the court must consider the best interests of the principal and will order relief that is the least restrictive to the exercise of the power of attorney while still adequate in the court's view to serve the principal's best interests. Upon entry of an order ruling on a petition, the court's oversight of the attorney in fact's actions and of the operation of the power of attorney ends unless another petition is filed under this chapter or unless the order specifies further court involvement that is necessary for a resolution of the issues raised in the petition.

NEW SECTION. Sec. 6. In any proceeding commenced by the filing of a petition under section 3 of this act by a person other than the attorney in fact, the court may in its discretion award costs, including reasonable attorneys' fees, to any person participating in the proceedings from any other person participating in the proceedings, or from the assets of the principal, as the court determines to be equitable. In determining what is equitable in making the award, the court must consider whether the petition was filed without reasonable cause, and order costs and fees paid by the attorney in fact individually only if the court determines that the attorney in fact has clearly violated his or her fiduciary duties or has refused without justification to cooperate with the principal or the principal's guardian or personal representative. In a proceeding to compel a third party to accept a power of attorney, the court may order costs, including reasonable attorneys' fees, to be paid by the third party only if the court determines that the third party did not have a good faith concern that the attorney in fact's exercise of authority would be improper. To the extent this section is inconsistent with RCW 11.96A.150, this section controls the award of costs and attorneys' fees in proceedings brought under section 3 of this act.

NEW SECTION. Sec. 7. The provisions of chapter 11.96A RCW, except for RCW 11.96A.260 through 11.96A.320, are applicable to proceedings commenced by the filing of a petition under section 3 of this act.

NEW SECTION. Sec. 8. (1) The following persons are entitled to notice of hearing on any petition under section 3 of this act:

(a) The principal;

(b) The principal's spouse;

(d) The guardian of the estate or person of the principal;

(e) Any other person identified in the petition as being interested in the action requested in the petition, or identified by the court as having a right to notice of the hearing. If a person would be excluded from bringing a petition under section 4(2) of this act, then that person is not entitled to notice of the hearing.

(2) Notwithstanding subsection (1) of this section, if the whereabouts of the principal are unknown or the principal is otherwise unavailable to receive notice, the court may waive the requirement of notice to the principal, and if the principal's spouse is similarly unavailable to receive notice, the court may waive the requirement of notice to the principal's spouse.

(3) Notice must be given as required under chapter 11.96A RCW, except that the parties entitled to notice shall be determined under this section.

Sec. 9. RCW 11.96A.040 and 1999 c 42 s 201 are each amended to read as follows:

(1) The superior court of every county has original subject matter jurisdiction over the probate of wills and the administration of estates of incapacitated, missing, and deceased individuals in all instances, including without limitation:

(a) When a resident of the state dies;

(b) When a nonresident of the state dies in the state; or

(2) The superior court of every county has original subject matter jurisdiction over trusts and all matters relating to trusts.

(3) The superior courts may: Probate or refuse to probate wills, appoint personal representatives, administer and settle the affairs and the estates of incapacitated, missing, or deceased individuals including but not limited to decedents' nonprobate assets; administer and settle matters that relate to nonprobate assets and arise under chapter 11.18 or 11.42 RCW; administer and settle all matters relating to trusts; administer and settle matters that relate to powers of attorney; award processes and cause to come before them all persons whom the courts deem it necessary to examine; order and cause to be issued all such writs and any other orders as are proper or necessary; and do all other things proper or incident to the exercise of jurisdiction under this section.

(4) The subject matter jurisdiction of the superior court applies without regard to venue. A proceeding or action by or before a superior court is not defective or invalid because of the selected venue if the court has jurisdiction of the subject matter of the action.

Sec. 10. RCW 11.96A.050 and 1999 c 42 s 202 are each amended to read as follows:

(1) Venue for proceedings pertaining to trusts shall be:

(a) For testamentary trusts established under wills probated in the state of Washington, in the superior court of the county where letters testamentary were granted to a personal representative of the estate subject to the will or, in the alternative, the superior court of the county of the situs of the trust; and

(b) For all other trusts, in the superior court of the county in which the situs of the trust is located, or, if the situs is not located in the state of Washington, in any county.

(2) Venue for proceedings subject to chapter 11.88 or 11.92 RCW shall be determined under the provisions of those chapters.

(3) Venue for proceedings pertaining to the probate of wills, the administration and disposition of a decedent's property, including nonprobate assets, and any other matter not identified in subsection (1) or (2) of this section, may be in any county in the state of Washington. A party to a proceeding may request that venue be changed if the request is made within four months of the mailing of the notice of appointment and pendency of probate required by RCW 11.28.237, and except for good cause shown, venue must be moved as follows:

(a) If the decedent was a resident of the state of Washington at the time of death, to the county of the decedent's residence; or

(b) If the decedent was not a resident of the state of Washington at the time of death, to any of the following:

(i) Any county in which any part of the probate estate might be;

(ii) If there are no probate assets, any county where any nonprobate asset might be; or

(iii) The county in which the decedent died.

(4) Once letters testamentary or of administration have been granted in the state of Washington, all orders, settlements, trials, and other proceedings under this title shall be had or made in the county in which such letters have been granted unless venue is moved as provided in subsection (2) of this section.

(5) Venue for proceedings pertaining to powers of attorney shall be in the superior court of the county of the principal's residence, except for good cause shown.

(6) If venue is moved, an action taken before venue is changed is not invalid because of the venue.

((~~(6)~~)) (7) Any request to change venue that is made more than four months after the commencement of the action may be granted in the discretion of the court.

Sec. 11. RCW 11.96A.120 and 1999 c 42 s 305 are each amended to read as follows:

(1) This section is intended to adopt the common law concept of virtual representation. This section supplements the common law relating to the doctrine of virtual representation and shall not be construed as limiting the application of that common law doctrine.

(2) Any notice requirement in this title is satisfied if notice is given as follows:

(a) Where an interest in an estate, trust, or nonprobate asset or an interest that may be affected by a power of attorney has been given to persons who comprise a certain class upon the happening of a certain event, notice may be given to the living persons who would constitute the class if the event had happened immediately before the commencement of the proceeding requiring notice, and the persons shall virtually represent all other members of the class;

(b) Where an interest in an estate, trust, or nonprobate asset or an interest that may be affected by a power of attorney has been given to a living person, and the same interest, or a share in it, is to pass to the surviving spouse or to persons who are, or might be, the distributees, heirs, issue, or other kindred of that living person upon the happening of a future event, notice may be given to that living person, and the living person shall virtually represent the surviving spouse, distributees, heirs, issue, or other kindred of the person; and

(c) Except as otherwise provided in this subsection, where an interest in an estate, trust, or nonprobate asset or an interest that may be affected by a power of attorney has been given to a person or a class of persons, or both, upon the happening of any future event, and the same interest or a share of the interest is to pass to another person or class of persons, or both, upon the happening of an additional future event, notice may be given to the living person or persons who would take the interest upon the happening of the first event, and the living person or persons shall virtually represent the persons and classes of persons who might take on the happening of the additional future event.

(3) A party is not virtually represented by a person receiving notice if a conflict of interest involving the matter is known to exist between the notified person and the party.

(4) An action taken by the court is conclusive and binding upon each person receiving actual or constructive notice or who is otherwise virtually represented.

Sec. 12. RCW 11.94.050 and 1989 c 87 s 1 are each amended to read as follows:

(1) Although a designated attorney in fact or agent has all powers of absolute ownership of the principal, or the document has language to indicate that the attorney in fact or agent shall have all the powers the principal would have if alive and competent, the attorney in fact or agent shall not have the power to make, amend, alter, or revoke the principal's wills or codicils, and shall not have the power, unless specifically provided otherwise in the document: To make, amend, alter, or revoke any of the principal's ((~~wills, codicils,~~)) life insurance, annuity, or similar contract beneficiary designations, employee benefit plan beneficiary designations, trust agreements, registration of the principal's securities in beneficiary form, payable on death or transfer on death beneficiary designations, designation of persons as joint tenants with right of survivorship with the principal with respect to any of the principal's property, community property agreements, or any other provisions for nonprobate transfer at death contained in nontestamentary instruments described in RCW 11.02.091; to make any gifts of property owned by the principal; to make transfers of property to any trust (whether or not created by the principal) unless the trust benefits the principal alone and does not have dispositive provisions which are different from those which would have governed the property had it not been transferred into the trust, or to disclaim property.

(2) Nothing in subsection (1) of this section prohibits an attorney in fact or agent from making any transfer of resources not prohibited under chapter 74.09 RCW when the transfer is for the purpose of qualifying the principal for medical assistance or the limited casualty program for the medically needy.

NEW SECTION. Sec. 13. Sections 1 and 3 through 8 of this act are each added to chapter 11.94 RCW."

SHB 1135 - S COMM AMD

By Committee on Judiciary

ADOPTED 04/04/01

On page 1, line 1 of the title, after "attorney;" strike the remainder of the title and insert "amending RCW 11.94.040, 11.96A.040, 11.96A.050, 11.96A.120, and 11.94.050; and adding new sections to chapter 11.94 RCW."