Chapter 13.1 Court Procedures for Resolving Trust and Estate Disputes

• Jurisdiction: Washington

§13.1 COURT PROCEDURES FOR RESOLVING TRUST AND ESTATE DISPUTES

Washington's Trust and Estate Dispute Resolution Act (TEDRA), Chapter 11.96A RCW, is very broad in scope. The overall purpose of this statute is to set forth generally applicable provisions for the resolution of disputes and other matters involving trusts and estates. RCW 11.96A.010. If there is any doubt about the applicability of TEDRA to a matter, "the court nevertheless has full power and authority to proceed with [the] administration and settlement [of the matter] in any manner and way that to the court seems right and proper, [so] that the matter[] may be expeditiously administered and settled by the court." RCW 11.96A.020(2).

TEDRA covers "[a]ll matters concerning the estates and assets of incapacitated, missing, and deceased persons, including matters involving nonprobate assets and powers of attorney," as well as "[a]ll trusts and trust matters." RCW 11.96A.020(1)(a), (b). RCW 11.96A.030(2) defines "matter" to include "any issue, question, or dispute involving" determination of classes of creditors, devisees, heirs, or other persons; the direction of a personal representative to do "or to abstain from doing" any act in a fiduciary capacity; "the determination of any question arising

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in the administration of an estate ... or with respect to any nonprobate asset"; amendment, reformation, or conformation of wills; inheritance rights of slayers and abusers of vulnerable adults; title to nonprobate assets; and the resolution of any matter referencing Title 11 RCW.

Despite all of the foregoing broad statutory language regarding TEDRA's scope, in 2018, the Washington Supreme Court articulated clear limits on the rights of beneficiaries to invoke court assistance in nonintervention estates, rejecting a request by certain beneficiaries to construe a will. The court held: "Once a court declares a nonintervention estate solvent, the court has no role in the estate except under narrow, statutorily created exceptions ...." In re Estate of Rathbone, 190 Wn.2d 332, 339, 412 P.3d 1283 (2018) (citing In re Estate of Jones, 152 Wn.2d 1, 9, 93 P.3d 147 (2004)). The Estate of Rathbone court further held that TEDRA does not provide an "independent basis to invoke the authority of superior courts over nonintervention wills." 190 Wn.2d at 346.

The limits to TEDRA jurisdiction over disputes in nonintervention probates announced in Estate of Rathbone were a surprise to many practitioners, and future legislative action may be taken to overturn the decision. In the meantime, counsel on any side of a dispute in a nonintervention probate should carefully analyze whether any specific provision of Title 11 provides a right and a remedy, rather than rely solely on the plenary jurisdiction provisions to invoke a right to substantive relief.

(1) Procedural rules

A judicial proceeding under TEDRA is a special proceeding under the civil rules. RCW 11.96A.090(1). Accordingly, Washington's special proceedings rules applicable to estates, including SPR 98.08W, SPR 98.10W, SPR 98.12W, SPR 98.16W, and SPR 98.20W, may apply to TEDRA proceedings. Many counties in Washington also maintain their own local civil rules applicable to TEDRA proceedings. See, e.g., King County LCR 98.04; King County LCR 98.14, King County LCR 98.16; King County LCR 98.20.

The provisions of TEDRA control over any inconsistent provision of the civil rules. RCW 11.96A.090(1). Procedural rules of court apply only to the extent consistent with TEDRA, unless statutorily required, required by other applicable court rules, or ordered by the court. RCW 11.96A.090(4). TEDRA procedures apply to estates of incapacitated persons, unless otherwise covered in Chapters 11.88 and 11.92 RCW. The provisions in Chapter 11.96A RCW do not supersede, but rather supplement, the provisions and procedures contained in Title 11 RCW,

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including Chapters 11.20 (Custody, proof, and probate of wills), 11.24 (Will contests), 11.28 (Letters testamentary and of administration), 11.40 (Claims against estate), 11.42 (Settlement of creditor claims for estates passing without probate), and 11.56 (Sales, exchanges, leases, mortgages, and borrowing). RCW 11.96A.080(2). TEDRA procedures, however, do not apply to actions for wrongful death under Chapter 4.20 RCW. Id.

(2) Commencing an action

An amendment adopted by the legislature in 2013 requires all TEDRA actions to be filed as new actions, RCW 11.96A.090(2); however, once filed, the new action may be consolidated with an existing action (usually a pending probate proceeding) either by a party for "good cause shown" or by the court on its own motion, RCW 11.96A.090(3). See also Sloans v. Berry, 189 Wn.App. 368, 373 n.1, 358 P.3d 426 (2015) (emphasizing statutory change that requires TEDRA petitions to be commenced as a new and separate action). This requirement has been the subject of criticism by practitioners and the judiciary and may be amended in the future.

New actions are commenced only by filing a TEDRA petition. RCW 11.96A.100(1). This requirement is in contrast to CR 3(a), which provides that a civil action is commenced either by service of a copy of the summons and complaint or by filing the complaint. Civil rule tolling rules generally apply, except that Chapter 11.24 RCW provides that a will contest is deemed commenced by filing, not by service on the personal representative, and that filing a petition contesting a will tolls the four-month limitations period for 90 days after the filing of the petition. Failure to serve the personal representative with notice of the will contest within 90 days after filing a petition contesting a will results in the action being deemed "not to have been commenced for purposes of tolling the statute of limitations." RCW 11.24.010; see also In re Estate of Jepsen, 184 Wn.2d 376, 382, 358 P.3d 403 (2015) (rejecting argument that electronic mail was sufficient service of will contest summons and petition). For further discussion of will contests, see §13.3 and §13.3(1)(b), below.

The legislature amended RCW 11.24.010 in 2007 to clarify the requirements for timely commencing a will contest, including the timing of service, in response to the Washington Supreme Court's holding in In re Estate of Kordon, 157 Wn.2d 206, 137 P.3d 16 (2006). See §13.3, below, for further discussion.

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(3) Statute of limitations

TEDRA's statutes of limitation are found in RCW 11.96A.070(1). TEDRA's statute of limitations provisions were amended in 2011 and 2013. The three-year statute of limitations for a proceeding against a statute of limitations provisions were amended in 2011 and 2013. The three-year statute of limitations for a proceeding against a trustee for breach of trust is tied to newer provisions describing the contents of a report to the beneficiaries by a trustee of an express trust that is "presumed to have provided sufficient information regarding the existence of potential claims for breach of trust...."RCW 11.96A.070(1)(b). The three-year statute of limitations for a claim of breach of trust begins to run when a report "adequately disclosed the existence of a potential claim for breach of trust and informed the beneficiary of the time allowed for commencing a proceeding" and "was delivered in the manner provided in RCW 11.96A.110 to the beneficiary or a representative of the beneficiary ...." RCW 11.96A.070(1); see also Anderson v. Dussault, 181 Wn.2d 360, 369, 333 P.3d 395 (2014) (because trust beneficiary did not have notice of court's approval of annual trust accountings, accountings did not trigger the TEDRA limitations period). See also the discussion of virtual representation in §13.2(2)(a), below.

The elements of a report that "adequately discloses the existence of a potential claim" are identified in RCW 11.96A.070(1)(b).

Caveat: The 2013 amendments to this statute of limitations provision do not address specifically whether the three-year statute of limitations can be asserted against a beneficiary who "knew or should have known" of the potential claim, even in the absence of a report meeting the criteria of RCW 11.96A.070(1)(b). See, e.g., Green v. Am Pharma. Co., 136 Wn.2d 87, 96, 960 P.2d 912 (1998); August v. U.S. Bancorp, 146 Wn.App. 328, 190 P.3d 86 (2008), review denied, 165 Wn.2d 1034 (2009). The Washington Trust Act amendments, however, specifically provide that claims barred by the running of the statute of limitations prior to their enactment are not revived. ("If a right is acquired, extinguished, or barred upon the expiration of a prescribed period that has commenced to run under any other statute before January 1, 2013, that statute continues to apply to the right even if it has been repealed or superseded." Laws of 2013 ch. 272, §28.)

An action against a personal representative for alleged breach of fiduciary duty by an heir, legatee, or other interested party (which are addressed in RCW 11.96A.070(3)) must be brought before the personal representative is discharged, except as provided in RCW 11.96A.250 with respect to a special representative. RCW 11.96A.070(2).

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Claims against special representatives appointed under RCW 11.96A.250 must be brought before the earlier of (1) the special representative's discharge as provided in RCW 11.96A.250 or (2) the entry of a court order under RCW 11.96A.240 approving the written agreement executed by the special representative in accordance with the provisions of RCW 11.96A.220. RCW 11.96A.070(3). This statute of limitations for special representatives confirms the legislature's "long-standing policy of promoting the prompt and efficient resolution of matters involving trusts and estates," to "[e]ncourage and facilitate the participation of qualified individuals as special representatives" and "[p]romote complete and final resolution of proceedings involving trusts and...