BILL REQ. #:  Z-0816.5 

Read first time 01/12/2004.   Referred to Committee on Judiciary.

     AN ACT Relating to trust and estate management; and amending RCW 21.35.005, 11.40.020, 11.40.030, 11.40.051, 11.40.070, 11.42.020, 11.42.030, 11.42.070, and 11.98.039.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1   RCW 21.35.005 and 2003 c 118 s 1 are each amended to read as follows:
     Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
     (1) "Beneficiary form" means a registration of a security that indicates the present owner of the security and the intention of the owner regarding the person who will become the owner of the security upon the death of the owner, referred to as a "beneficiary."
     (2) "Devisee" means any person designated in a will to receive a disposition of real or personal property.
     (3) "Heirs" means those persons, including the surviving spouse, who are entitled under the statutes of intestate succession to the property of a decedent.
     (4) "Person" means an individual, a corporation, an organization, or other legal entity.
     (5) "Personal representative" includes executor, administrator, successor personal representative, special administrator, and persons who perform substantially the same function under the law governing their status.
     (6) "Property" includes both real and personal property or any interest therein and means anything that may be the subject of ownership.
     (7) "Register," including its derivatives, means to issue a certificate showing the ownership of a certificated security or, in the case of an uncertificated security, to initiate or transfer an account showing ownership of securities.
     (8) "Registering entity" means a person who originates or transfers a security title by registration, and includes a broker maintaining security accounts for customers and a transfer agent or other person acting for or as an issuer of securities.
     (9) "Security" means a share, participation, or other interest in property, in a business, or in an obligation of an enterprise or other issuer, and includes a certificated security, an uncertificated security, and a security account.
     (10) "Security account" means (a) a reinvestment account associated with a security; a securities account with a broker; a cash balance in a brokerage account; or cash, cash equivalents, interest, earnings, or dividends earned or declared on a security in an account, a reinvestment account, or a brokerage account, whether or not credited to the account before the owner's death; (b) an agency account including, without limitation, an investment management account, investment advisory account, or custody account with a trust company or a trust division of a bank with trust powers, including the securities in the account; a cash balance in the account; and cash, cash equivalents, interest, earnings, or dividends earned or declared on a security in the account, whether or not credited to the account before the owner's death; or (c) a cash balance or other property held for or due to the owner of a security as a replacement for or product of an account security, whether or not credited to the account before the owner's death.
     (11) "State" includes any state of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and any territory or possession subject to the legislative authority of the United States.

Sec. 2   RCW 11.40.020 and 1999 c 42 s 601 are each amended to read as follows:
     (1) Subject to subsection (2) of this section, a personal representative may give notice to the creditors of the decedent, ((as directed)) in substantially the form set forth in RCW 11.40.030, announcing the personal representative's appointment and requiring that persons having claims against the decedent present their claims within the time specified in RCW 11.40.051 or be forever barred as to claims against the decedent's probate and nonprobate assets. If notice is given:
     (a) The personal representative shall first file the original of the notice with the court;
     (b) The personal representative shall then cause the notice to be published once each week for three successive weeks in a legal newspaper in the county in which the estate is being administered((, and if the decedent was a Washington resident, in the county of the decedent's residence at the time of death, if different));
     (c) The personal representative may, at any time during the probate proceeding, give actual notice to creditors who become known to the personal representative by serving the notice on the creditor or mailing the notice to the creditor at the creditor's last known address, by regular first class mail, postage prepaid; and
     (d) The personal representative shall also mail a copy of the notice, including the decedent's social security number, to the state of Washington department of social and health services office of financial recovery.
     The personal representative shall file with the court proof by affidavit of the giving and publication of the notice.
     (2) If the decedent was a resident of the state of Washington at the time of death and probate proceedings are commenced in a county other than the county of the decedent's residence, then in addition to the requirements under subsection (1) of this section, the personal representative shall cause the notice to creditors in substantially the form set forth in RCW 11.40.030 to be published once each week for three successive weeks in a legal newspaper in the county of the decedent's residence and shall file the notice ((to the creditors of the decedent as directed in RCW 11.40.030 must be filed)) with the superior court of the county of the decedent's residence.

Sec. 3   RCW 11.40.030 and 1997 c 252 s 9 are each amended to read as follows:
     Notice under RCW 11.40.020 must contain the following elements in substantially the following form:

Sec. 4   RCW 11.40.051 and 1997 c 252 s 11 are each amended to read as follows:
     (1) Whether or not notice is provided under RCW 11.40.020, a person having a claim against the decedent is forever barred from making a claim or commencing an action against the decedent, if the claim or action is not already barred by an otherwise applicable statute of limitations, unless the creditor presents the claim in the manner provided in RCW 11.40.070 within the following time limitations:
     (a) If the personal representative provided notice under RCW 11.40.020(1) ((and (2))) (a) and (b) and the creditor was given actual notice as provided in RCW 11.40.020(((3))) (1)(c), the creditor must present the claim within the later of: (i) Thirty days after the personal representative's service or mailing of notice to the creditor; and (ii) four months after the date of first publication of the notice;
     (b) If the personal representative provided notice under RCW 11.40.020(1) ((and (2))) (a) and (b) and the creditor was not given actual notice as provided in RCW 11.40.020(((3))) (1)(c):
     (i) If the creditor was not reasonably ascertainable, as defined in RCW 11.40.040, the creditor must present the claim within four months after the date of first publication of notice;
     (ii) If the creditor was reasonably ascertainable, as defined in RCW 11.40.040, the creditor must present the claim within twenty-four months after the decedent's date of death; and
     (c) If notice was not provided under this chapter or chapter 11.42 RCW, the creditor must present the claim within twenty-four months after the decedent's date of death.
     (2) An otherwise applicable statute of limitations applies without regard to the tolling provisions of RCW 4.16.190.
     (3) This bar is effective as to claims against both the decedent's probate and nonprobate assets.

Sec. 5   RCW 11.40.070 and 1997 c 252 s 13 are each amended to read as follows:
     (1) The claimant, the claimant's attorney, or the claimant's agent shall sign the claim and include in the claim the following information:
     (a) The name and address of the claimant;
     (b) The name, address, if different from that of the claimant, and nature of authority of an agent signing the claim on behalf of the claimant;
     (c) A statement of the facts or circumstances constituting the basis of the claim;
     (d) The amount of the claim; and
     (e) If the claim is secured, unliquidated, contingent, or not yet due, the nature of the security, the nature of the uncertainty, or the date when it will become due.
     Failure to describe correctly the information in (c), (d), or (e) of this subsection, if the failure is not substantially misleading, does not invalidate the claim.
     (2) A claim does not need to be supported by affidavit.
     (3) A claim must be presented within the time limits set forth in RCW 11.40.051 by: (a) Serving on or mailing to, by regular first class mail, the personal representative or the personal representative's attorney a copy of the signed claim; and (b) filing the original of the signed claim with the court in which probate proceedings were commenced. A claim is deemed presented upon the later of the date of postmark or service on the personal representative, or the personal representative's attorney, and filing with the court.
     (4) Notwithstanding any other provision of this chapter, if a claimant makes a written demand for payment within the time limits set forth in RCW 11.40.051, the personal representative may waive formal defects and elect to treat the demand as a claim properly filed under this chapter if: (a) The claim was due; (b) the amount paid is the amount of indebtedness over and above all payments and offsets; (c) the estate is solvent; and (d) the payment is made in good faith. Nothing in this chapter limits application of the doctrines of waiver, estoppel, or detrimental claims or any other equitable principle.

Sec. 6   RCW 11.42.020 and 1997 c 252 s 25 are each amended to read as follows:
     (1) The notice agent may give nonprobate notice to the creditors of the decedent if:
     (a) As of the date of the filing of the notice to creditors with the court, the notice agent has no knowledge of another person acting as notice agent or of the appointment of a personal representative in the decedent's estate in the state of Washington; and
     (b) According to the records of the court as are available on the date of the filing of the notice to creditors, no cause number regarding the decedent has been issued to any other notice agent and no personal representative of the decedent's estate had been appointed.
     (2) The notice agent must give notice to the creditors of the decedent, ((as directed)) in substantially the form set forth in RCW 11.42.030, announcing that the notice agent has elected to give nonprobate notice to creditors and requiring that persons having claims against the decedent present their claims within the time specified in RCW 11.42.050 or be forever barred as to claims against the decedent's probate and nonprobate assets.
     (a) The notice agent shall first file the original of the notice with the court.
     (b) The notice agent shall then cause the notice to be published once each week for three successive weeks in a legal newspaper in the notice county.
     (c) The notice agent may at any time give actual notice to creditors who become known to the notice agent by serving the notice on the creditor or mailing the notice to the creditor at the creditor's last known address, by regular first class mail, postage prepaid.
     (d) The notice agent shall also mail a copy of the notice, including the decedent's social security number, to the state of Washington department of social and health services' office of financial recovery.
     (e) If the decedent was a resident of the state of Washington at the time of death and the notice agent's declaration and oath were filed in a county other than the county of the decedent's residence, then in addition to the requirements in this section, the notice agent shall cause the notice to creditors in substantially the form set forth in RCW 11.42.030 to be published once each week for three successive weeks in a legal newspaper in the county of the decedent's residence and shall file the notice with the superior court of the county of the decedent's residence.
     The notice agent shall file with the court proof by affidavit of the giving and publication of the notice.

Sec. 7   RCW 11.42.030 and 1997 c 252 s 26 are each amended to read as follows:
     Notice under RCW 11.42.020 must contain the following elements in substantially the following form:

Sec. 8   RCW 11.42.070 and 1997 c 252 s 30 are each amended to read as follows:
     (1) The claimant, the claimant's attorney, or the claimant's agent shall sign the claim and include in the claim the following information:
     (a) The name and address of the claimant;
     (b) The name, address, if different from that of the claimant, and nature of authority of an agent signing the claim on behalf of the claimant;
     (c) A statement of the facts or circumstances constituting the basis of the claim;
     (d) The amount of the claim; and
     (e) If the claim is secured, unliquidated, contingent, or not yet due, the nature of the security, the nature of the uncertainty, or the date when it will become due.
     Failure to describe correctly the information in (c), (d), or (e) of this subsection, if the failure is not substantially misleading, does not invalidate the claim.
     (2) A claim does not need to be supported by affidavit.
     (3) A claim must be presented within the time limits set forth in RCW 11.42.050 by: (a) Serving on or mailing to, by regular first class mail, the notice agent or the notice agent's attorney a copy of the signed claim; and (b) filing the original of the signed claim with the court in which the notice agent's declaration and oath were filed. A claim is deemed presented upon the later of the date of postmark or service on the notice agent, or the notice agent's attorney, and filing with the court.
     (4) Notwithstanding any other provision of this chapter, if a claimant makes a written demand for payment within the time limits set forth in RCW 11.42.050, the notice agent may waive formal defects and elect to treat the demand as a claim properly filed under this chapter if: (a) The claim was due; (b) the amount paid was the amount of indebtedness over and above all payments and offsets; (c) the estate is solvent; and (d) the payment is made in good faith. Nothing in this chapter limits application of the doctrines of waiver, estoppel, or detrimental claims or any other equitable principle.

Sec. 9   RCW 11.98.039 and 1999 c 42 s 618 are each amended to read as follows:
     (1) Where a vacancy occurs in the office of the trustee and there is a successor trustee who is willing to serve as trustee and (a) is named in the governing instrument as successor trustee or (b) has been selected to serve as successor trustee under the procedure established in the governing instrument for the selection of a successor trustee, the outgoing trustee, or any other interested party, shall give notice of such vacancy, whether arising because of the trustee's resignation or because of any other reason, and of the successor trustee's agreement to serve as trustee, to all adult income beneficiaries of the trust and to all known and identifiable adults for whom the income of the trust is being accumulated. If there are no such adults, no notice need be given. The successor trustee named in the governing instrument or selected pursuant to the procedure therefor established in the governing instrument shall be entitled to act as trustee except for good cause or disqualification. The successor trustee shall serve as of the effective date of the discharge of the predecessor trustee as provided in RCW 11.98.041.
     (2) Where a vacancy exists or occurs in the office of the trustee and there is no successor trustee who is named in the governing instrument or who has been selected to serve as successor trustee under the procedure established in the governing instrument for the selection of a successor trustee, and who is willing to serve as trustee, the beneficiaries and the then-acting trustee, if any, of a trust may agree to a nonjudicial change of the trustee under RCW 11.96A.220. The trustee, or any beneficiary if there is no then-acting trustee, shall give written notice of the proposed change in trustee to every beneficiary or special representative, and to the trustor if alive. The notice shall: (a) State the name and mailing address of the trustee or the beneficiary giving the notice; (b) include a copy of the governing instrument; (c) state the name and mailing address of the successor trustee; and (d) include a copy of the proposed successor trustee's agreement to serve as trustee. The notice shall advise the recipient of the right to petition for a judicial appointment or change in trustee as provided in subsection (((3))) (4) of this section. The notice shall include a form on which consent or objection to the proposed change in trustee may be indicated. The successor trustee shall serve as of the effective date of the discharge of the predecessor trustee as provided in RCW 11.98.041 or, in circumstances where there is no predecessor trustee, as of the effective date of the trustee's appointment.
     (3) When there is a desire to name one or more co-trustee to serve with the existing trustee, the trustor, if alive, the beneficiaries, and the then acting trustee of a trust may agree to the nonjudicial addition of one or more co-trustees under RCW 11.96A.220. The trustor, the trustee, or any beneficiary shall give written notice of the proposed addition of one or more co-trustees to the trustor, if alive, to every beneficiary, to any trustee, and to any special representative. The notice shall: (a) State the name and mailing address of the party giving notice, and their relationship to the trust, whether as trustor, trustee, or beneficiary; (b) include a copy of the governing instrument; (c) state the name and mailing address of a co-trustee being appointed; and (d) include a copy of a proposed successor co-trustee's agreement to serve as co-trustee. The notice shall include a form on which consent or objection to the proposed addition of a co-trustee may be indicated. An additional co-trustee shall serve as of the effective date of the co-trustee's appointment.
     (4) Any beneficiary of a trust, the trustor, if alive, or the trustee may petition the superior court having jurisdiction for the appointment or change of a trustee or co-trustee under the procedures provided in RCW 11.96A.080 through 11.96A.200: (a) Whenever the office of trustee becomes vacant; (b) upon filing of a petition of resignation by a trustee; (c) upon the giving of notice of the change in trustee or the addition of one or more co-trustees as referred to in subsections (1) ((or (2))) through (3) of this section; or (d) for any other reasonable cause.
     (((4))) (5) For purposes of this subsection, the term fiduciary includes both trustee and personal representative.
     (a) Except as otherwise provided in the governing instrument, a successor fiduciary, absent actual knowledge of a breach of fiduciary duty: (i) Is not liable for any act or omission of a predecessor fiduciary and is not obligated to inquire into the validity or propriety of any such act or omission; (ii) is authorized to accept as conclusively accurate any accounting or statement of assets tendered to the successor fiduciary by a predecessor fiduciary; and (iii) is authorized to receipt only for assets actually delivered and has no duty to make further inquiry as to undisclosed assets of the trust or estate.
     (b) Nothing in this section relieves a successor fiduciary from liability for retaining improper investments, nor does this section in any way bar the successor fiduciary, trust beneficiaries, or other party in interest from bringing an action against a predecessor fiduciary arising out of the acts or omissions of the predecessor fiduciary, nor does it relieve the successor fiduciary of liability for its own acts or omissions except as specifically stated or authorized in this section.