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RayAnswers
RayAnswers, Attorney
Category: Estate Law
Satisfied Customers: 29632
Experience:  Texas lawyer for 29 years in Estate law
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I am the Successor Trustee of my parents Revocable Living Trust.

Customer Question

I am the Successor Trustee of my parents Revocable Living Trust. (Washington State) The Trust simply states the estate is to be split 3 ways. (Myself and 2 brothers.) No other conditions are stated in the Trust. My father signed over the family home to me several years before his death, with the intent that I would not have to sell the house and could maintain the family presence on what is left of his fathers homestead. Brother #2 lived in another family home historically did not pay rent and was not asked to pay rent. That house has been sold. Brother #1 is demanding 1/3 rent on that house and my home for the duration that the trust has been in effect since our fathers death. I have been told this rent request is a non issue as it is not addressed in the Trust papers. The Trust also has a clause that in effect disinherits any beneficiary that contests or attacks the trust or its provisions, directly or indirectly.
I have gathered assets of trust and sold property to gather cash to distribute and I am wondering if I should ignore this rent request?
Submitted: 11 months ago.
Category: Estate Law
Expert:  RayAnswers replied 11 months ago.

Hi and welcome to JA. My name is XXXXX XXXXX I will be assisting you today.

Let me confirm here which houses are part of the trust and which were transferred directly.If I understand your posting the house that you are living in or were living in was transferred to you and not part of the trust.

 

Brother #1 is seeking rent from a house that has been in your name as well as one that other brother has been living in but titled under the name of the trust.Is that correct

??

 

If you can give me more information I will be glad to respond and help you.

Customer: replied 11 months ago.


My father and I believed that quitclaiming the house to me took it out of the trust. However the trust lawyer that wrote the trust says it remained in the trust, because no additional paper was filed to explicitly remove it from the trust.(Even though the same lawyer handled the quitclaim he did not advise us of that.) I have agreed that the assessed value of the house is still part of the trust and that it is my distribution.


Yes, in answer to your question, rent on both properties.

Expert:  RayAnswers replied 11 months ago.
You should consider responding to the brother in writing that the trust did not provide or require that you or the other brother pay rent.You would include anything that you did in this period such as maintenance and preservation of the house.If there was delay in being able to sell the property again frame your reasons for the time it has taken to sell the property and distribute funds.

You might want to have the lawyer prepare the letter here because you are in essence defending the fact that no rent was required here.You have a fiduciary duty to both the trust and the heirs including this brother so framing your arguments here knowing it is possible there may be litigation over it is a good idea.

The lawyer woudl also include the fact that theTrust contains the clause that in effect disinherits any beneficiary that contests or attacks the trust or its provisions, directly or indirectly.


The lawyer should also admit that they may have been partially responsible for any delay in selling the properties.The lawyer may ask for a written release here in order to disburse funds.A signed release would protect you from suit.


It is important for you to set out the facts here that offer you the best defense in case it comes to a suit later on.The argument from the brother is that two of you benefited at the expense of the other beneficiary. If it was necessary for you to occupy the premises or that repairs had to be made ,etc setting this out in a response letter ot brother is a good idea.If you have lawyer draft it maybe he decides you will contest any suit based on the facts that you set out.It is certainly possible for you to include the fact that trust does not reference the requirement ot pay rent , etc.

And then you would wait to see if brother signs release and accepts the disbursemnet or files a civil suit.Using the lawyer here to act as intermediary and prepare the letter is a good idea as well as the release.This is a legitimate expense to the trust and woudl come before disbursement of remaining funds.

I appreciate your patience today.Please let me know if you have more follow up.Thanks again.

RayAnswers, Attorney
Category: Estate Law
Satisfied Customers: 29632
Experience: Texas lawyer for 29 years in Estate law
RayAnswers and other Estate Law Specialists are ready to help you
Expert:  RayAnswers replied 11 months ago.

Here you would want a release in return for you paying the brother his share here of funds from sale.

Law..

RCW 11.98.108

Nonliability of trustee — Beneficiary's consent, release, or ratification.

A trustee is not liable to a beneficiary for breach of trust if the beneficiary consented to the conduct constituting the breach, released the trustee from liability for the breach, or ratified the transaction constituting the breach, unless:

(1) The consent, release, or ratification of the beneficiary was induced by improper conduct of the trustee; or

(2) At the time of the consent, release, or ratification, the beneficiary did not know of the beneficiary's rights or of the material facts relating to the breach.

 

Here is the entire Washington Trust Code it deals with many of these issues including duties, damages, etc that might come up here.

 

http://apps.leg.wa.gov/rcw/default.aspx?cite=11.98

 

Your other option is to try and resolve this with brother for a sum and get a written release.You always have right to try and resolve this even if you disagree anything is owed.

 

Thanks again and good luck here with all.Please let me know if you have more follow up here.Good luck with the brother.

Customer: replied 10 months ago.

Thank you for your answer.


Below is the response I got back from my brother Steve.


In my opinion his request for rent is out of line and at best just a punitive measure against my brother Stuart. I don't believe I should pay him rent as my house was passed on to me before father died, but appraised value is still included for total value to the estate/trust. As for the cost of water heater and carpet cleaning that is just part of preparing the house for sale and part of maintaining the property.


What are your thoughts?


 


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From:STEVEN CLIFT (XXXXX@XXXXXX.XXX) This sender is in your contact list.
Sent:Sun 10/20/13 12:47 PM
To:Curtis Clift (XXXXX@XXXXXX.XXX); Stu Clift (XXXXX@XXXXXX.XXX)







Dear Curtis and Stuart A few problems I see in closing, 1. As we discussed earlier, after Dad's passing in Nov. that free housing for Stu was no longer obligated by the trust. It was my understanding that rent would be deducted from Stu's Distribution and added to the total value of the trust. I do not think this is unreasonable, after all he's been living rent free for 15 years. If I remember right, all Stu had to pay was $300 a month, over 15 years that is a loss to the estate of $54,000 and that does not account for the Taxes and insurance paid over the last 15 years. In real life over the pass 15 years if Dad had rented it out at only 1,000 a month the income would have been $180,000. According to the appraisal on the house, rent would be $1627 a month, that would be 16,270 due the trust, if you don't want your share, that's find, but lets put $5,423.33 into my share of the distribution. 2. I also believe Stu should pay for the carpet cleaning of $480 that normal charge to a renter. 3. The cost of the water heater should also be to Stuart. I don't think Stuart should have any problem with the above, considering the last 15 years rent free. (Stuart, if you have a problem with this, let me know.) Curtis, are you letting the above slide because Stu is lending you $64,506.03. I hope you just overlooked the above 3 items. 4. I know you don't agree but the house in Yakima although in your name is still part of the trust estate until closing of the estate and final distribution. Rent on the house, per Zillow, would be about $1058 a month, (Zillow also states the house is worth $329,490, so I think you did ok at 250,000.) so to be fair lets just make it 900 a month x 10 is 9000 Divided by 3 =3000. I am not going to argue over $3,000, I will leave that to you. So I am looking at adding the rent 16,270.00 , carpet cleaning 480.00 and water heater 1034.78 for a total of $17,784.78 added to the $556,481.91 for a grand total of 574,266.69. Divided by 3 = $191,422.23 If that's OK with you guys, get it done. Sincerely Steve






 

Expert:  RayAnswers replied 10 months ago.
You woudl respond and respectfully disagree.Remember he has nothing in writing that requires payment of rent.These are just figures he assembled.You are free to counter with what you think fair resolution should be.

Obviously there are competing viewpoints and you have right to counter with what you feel is fair resolution of the situation.Remember everything is negotiable and you don't have to agree here about rent.Even rent if it is owed and its not in writing that it is is negotiable.He is using zillow realisitically this is all hypthetical.Counter with a much lower number if you want to try and resolve it.

Thanks for the follow up.
Customer: replied 10 months ago.

Ray this is my planned answer back. Any red flags?


 


Dear Steven,


 


I have given your requests due consideration and have consulted with others that have experience with these matters. The overall conclusion is that I have acted rightly in carrying out the intent of the Trust and the desires of our parents. That is in fact the reason why Mom and Dad chose me to be Successor Trustee. They knew I would act in a fair and balanced manner no matter how hard that might be. Most of all they knew I would not be swayed by the thinking of others and would hold true to their wishes and the historical manner in which they dealt with their affairs. Their credo essentially boils down to; take care of others, don't ask for more then what you have earned and do the right thing.


 


All of your requests have had the nature of self enriching yourself or seeking some sort of punitive damages against Stuart and myself. Further more your disparaging and accusatory remarks certainly go against their thinking. Frankly this is not what our parents would have wanted. However this sort of behavior was foreseen by them and is the exact reason why there is a disinheritance clause in the Trust.


 


As for you using data from Zillow as a realistic vs. theoretical is invalid. Many more considerations would have to be made not just what factors Zillow uses. All of which would devalue the property from what Zillow knows of the neighborhood.


 


It is in fact normal for a landlord to pay for things such as a failed Water Heater and the cleaning of carpets. However I am willing to charge that back against Stuarts distribution as wear and tear on the property, although it is not a normal charge to a tenant and Stuart has agreed. Note that this action does not take effect unless you consent to finalizing the Trust.


 


Bottom line is the Trust only has so much value. That has been determined.


 


Should you elect to follow through with your threats to remove me as Successor Trustee or to challenge the provisions of the Trust, certainly could put the disinheritance clause into effect. Case law on these matters historically runs both ways and depends on the Judge. You should also be aware that I have a list of people that will stand up on my behalf and backup what our parents wanted. I strongly suggest you take the deal I have offered and lets put this behind us. To do otherwise would only reduce the value of the Trust of which I'm sure you are aware.


 


I would really like to finish this in all of our favors, as is. I owe it to Mom and Dad to carry out what they wanted. Simply that their three sons don't fight and share the remaining assets as they desired. This is not about, what should have been or what could have been or what might have been. It is about what Mom and Dad deemed to be right and proper, the fair division of their remaining assets after their death. Lets do it right!


 


Sincerely,


Curtis

Expert:  RayAnswers replied 10 months ago.
Hi and good afternoon.This seems like it is reasonable and to the point.Your brother may never agree here but all you can to is try to resolve it and you are countering him in a resonable manner.Why not send it and see how it goes.You are responding in a pretty balanced manner.I hope he will decide to resolve it with you.

Thanks for the follow up.

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