title: RCW 11.104B.110

text:
(1) Except as otherwise provided in subsection (2) of this section, this article applies to:
(a) An income trust, unless the terms of the trust expressly prohibit use of this article by a specific reference to this article or an explicit expression of intent that net income not be calculated as a unitrust amount; and
(b) An express unitrust, except to the extent the terms of the trust explicitly:
(i) Prohibit use of this article by a specific reference to this article;
(ii) Prohibit conversion to an income trust; or
(iii) Limit changes to the method of calculating the unitrust amount.
(2) This article does not apply to a trust described in 26 U.S.C. Sec. 170(f)(2)(B), 642(c)(5), 664(d), or 2702 (a)(3)(A)(ii) or (iii) or (b), as amended, as of January 1, 2022.
(3) An income trust to which this article applies under subsection (1)(a) of this section may be converted to a unitrust under this article regardless of the terms of the trust concerning distributions. Conversion to a unitrust under this article does not affect other terms of the trust concerning distributions of income or principal.
(4) This article applies to an estate only to the extent a trust is a beneficiary of the estate. To the extent of the trust's interest in the estate, the estate may be administered as a unitrust, the administration of the estate as a unitrust may be discontinued, or the percentage or method used to calculate the unitrust amount may be changed, in the same manner as for a trust under this article.
(5) This article does not create a duty to take or consider action under this article or to inform a beneficiary about the applicability of this article.
(6) A fiduciary that in good faith takes or fails to take an action under this article is not liable to a person affected by the action or inaction.
[ 2021 c 140 s 2302.]


doc_type: statute

jurisdiction: wa

title: RCW 11.104B.120

text:
(1) A fiduciary, without court approval, by complying with subsections (2) and (6) of this section, may:
(a) Convert an income trust to a unitrust if the fiduciary adopts in a record a unitrust policy for the trust providing:
(i) That in administering the trust the net income of the trust will be a unitrust amount rather than net income determined without regard to this article; and
(ii) The percentage and method used to calculate the unitrust amount;
(b) Change the percentage or method used to calculate a unitrust amount for a unitrust if the fiduciary adopts in a record a unitrust policy or an amendment or replacement of a unitrust policy providing changes in the percentage or method used to calculate the unitrust amount; or
(c) Convert a unitrust to an income trust if the fiduciary adopts in a record a determination that, in administering the trust, the net income of the trust will be net income determined without regard to this article rather than a unitrust amount.
(2) A fiduciary may take an action under subsection (1) of this section if:
(a) The fiduciary determines that the action will assist the fiduciary to administer a trust impartially;
(b) The fiduciary sends a notice in a record, in the manner required by RCW 11.104B.130, describing and proposing to take the action;
(c) The fiduciary sends a copy of the notice under (b) of this subsection (2) to each settlor of the trust which is:
(i) If an individual, living; or
(ii) If not an individual, in existence;
(d) At least one member of each class of beneficiaries receiving the notice under (b) of this subsection (2) is:
(i) If an individual, legally competent;
(ii) If not an individual, in existence; or
(iii) Represented in the manner provided in RCW 11.104B.130(2); and
(e) The fiduciary does not receive, by the date specified in the notice under RCW 11.104B.130(3)(f), an objection in a record to the action proposed under (b) of this subsection (2) from a person to which the notice under (b) of this subsection (2) is sent.
(3) If a fiduciary receives, not later than the date stated in the notice under RCW 11.104B.130(3)(e), an objection in a record described in RCW 11.104B.130(3)(d) to a proposed action, the fiduciary or a beneficiary may request the court to have the proposed action taken as proposed, taken with modifications, or prevented. A person described in RCW 11.104B.130(1) may oppose the proposed action in the proceeding under this subsection, whether or not the person:
(a) Consented under RCW 11.104B.130(2); or
(b) Objected under RCW 11.104B.130(3)(d).
(4) If, after sending a notice under subsection (2)(b) of this section, a fiduciary decides not to take the action proposed in the notice, the fiduciary shall notify in a record each person described in RCW 11.104B.130(1) of the decision not to take the action and the reasons for the decision.
(5) If a beneficiary requests in a record that a fiduciary take an action described in subsection (1) of this section and the fiduciary declines to act or does not act within 90 days after receiving the request, the beneficiary may request the court to direct the fiduciary to take the action requested.
(6) In deciding whether and how to take an action authorized by subsection (1) of this section, or whether and how to respond to a request by a beneficiary under subsection (5) of this section, a fiduciary shall consider all factors relevant to the trust and the beneficiaries, including relevant factors in RCW 11.104B.050(5).
(7) A fiduciary may release or delegate the power to convert an income trust to a unitrust under subsection (1)(a) of this section, change the percentage or method used to calculate a unitrust amount under subsection (1)(b) of this section, or convert a unitrust to an income trust under subsection (1)(c) of this section, for a reason described in RCW 11.104B.070(7) and in the manner described in RCW 11.104B.070(8).
[ 2021 c 140 s 2303.]

license: public-domain-government-work

rule_set: Revised Code of Washington

catchline: Unitrusts—Authority of fiduciary.

code: rcw

unit: section

court: Washington State Legislature


title: RCW 11.104B.130

text:
(1) A notice required by RCW 11.104B.120(2)(b) must be sent to:
(a) All beneficiaries that receive or are entitled to receive income from the trust or would be entitled to receive a distribution of principal if the trust were terminated at the time the notice is sent, assuming no power of appointment is exercised; and
(b) Each person that is granted a power over the trust by the terms of the trust, to the extent the power is exercisable when the person is not then serving as a trustee:
(i) Including a:
(A) Power over the investment, management, or distribution of trust property or other matters of trust administration; and
(B) Power to appoint or remove a trustee or person described in this subsection; and
(ii) Excluding a:
(A) Power of appointment;
(B) Power of a beneficiary over the trust, to the extent the exercise or nonexercise of the power affects the beneficial interest of the beneficiary; and
(C) Power over the trust if the terms of the trust provide that the power is held in a nonfiduciary capacity and the power must be held in a nonfiduciary capacity to achieve a tax objective under the federal internal revenue code of 1986, as amended, as of January 1, 2022.
(2) A person may consent in a record at any time to action proposed under RCW 11.104B.120(2)(b). A notice required by RCW 11.104B.120(2)(b) need not be sent to a person that consents under this subsection.
(3) A notice required by RCW 11.104B.120(2)(b) must include:
(a) The action proposed under RCW 11.104B.120(2)(b);
(b) For a conversion of an income trust to a unitrust, a copy of the unitrust policy adopted under RCW 11.104B.120(1)(a);
(c) For a change in the percentage or method used to calculate the unitrust amount, a copy of the unitrust policy or amendment or replacement of the unitrust policy adopted under RCW 11.104B.120(1)(b);
(d) A statement that the person to which the notice is sent may object to the proposed action by stating in a record the basis for the objection and sending or delivering the record to the fiduciary;
(e) The date by which an objection under (d) of this subsection (3) must be received by the fiduciary, which must be at least 30 days after the date the notice is sent;
(f) The date on which the action is proposed to be taken and the date on which the action is proposed to take effect;
(g) The name and contact information of the fiduciary; and
(h) The name and contact information of a person that may be contacted for additional information.
[ 2021 c 140 s 2304.]

catchline: Unitrusts—Notice.


title: RCW 11.104B.140

text:
(1) In administering a unitrust under this article, a fiduciary shall follow a unitrust policy adopted under RCW 11.104B.120(1) (a) or (b) or amended or replaced under RCW 11.104B.120(1)(b).
(2) A unitrust policy must provide:
(a) The unitrust rate or the method for determining the unitrust rate under RCW 11.104B.150;
(b) The method for determining the applicable value under RCW 11.104B.160; and
(c) The rules described in RCW 11.104B.150 through 11.104B.180, which apply in the administration of the unitrust, whether the rules are:
(i) Mandatory, as provided in RCW 11.104B.160(1) and 11.104B.170(1); or
(ii) Optional, as provided in RCW 11.104B.150, 11.104B.160(2), 11.104B.170(2), and 11.104B.180(1), to the extent the fiduciary elects to adopt those rules.
[ 2021 c 140 s 2305.]

catchline: Unitrusts—Unitrust policies.


title: RCW 11.104B.150

text:
(1) Except as otherwise provided in RCW 11.104B.180(2)(a), a unitrust rate may be:
(a) A fixed unitrust rate; or
(b) A unitrust rate that is determined for each period using:
(i) A market index or other published data; or
(ii) A mathematical blend of market indices or other published data over a stated number of preceding periods.
(2) Except as otherwise provided in RCW 11.104B.180(2)(a), a unitrust policy may provide:
(a) A limit on how high the unitrust rate determined under subsection (1)(b) of this section may rise;
(b) A limit on how low the unitrust rate determined under subsection (1)(b) of this section may fall;
(c) A limit on how much the unitrust rate determined under subsection (1)(b) of this section may increase over the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods;
(d) A limit on how much the unitrust rate determined under subsection (1)(b) of this section may decrease below the unitrust rate for the preceding period or a mathematical blend of unitrust rates over a stated number of preceding periods; or
(e) A mathematical blend of any of the unitrust rates determined under subsection (1)(b) of this section and (a) through (d) of this subsection.
[ 2021 c 140 s 2306.]

catchline: Unitrusts—Unitrust rates.


title: RCW 11.104B.160

text:
(1) A unitrust policy must provide the method for determining the fair market value of an asset for the purpose of determining the unitrust amount, including:
(a) The frequency of valuing the asset, which need not require a valuation in every period; and
(b) The date for valuing the asset in each period in which the asset is valued.
(2) Except as otherwise provided in RCW 11.104B.180(2)(b), a unitrust policy may provide methods for determining the amount of the net fair market value of the trust to take into account in determining the applicable value, including:
(a) Obtaining an appraisal of an asset for which fair market value is not readily available;
(b) Exclusion of specific assets or groups or types of assets;
(c) Other exceptions or modifications of the treatment of specific assets or groups or types of assets;
(d) Identification and treatment of cash or property held for distribution;
(e) Use of:
(i) An average of fair market values over a stated number of preceding periods; or
(ii) Another mathematical blend of fair market values over a stated number of preceding periods;
(f) A limit on how much the applicable value of all assets, groups of assets, or individual assets may increase over:
(i) The corresponding applicable value for the preceding period; or
(ii) A mathematical blend of applicable values over a stated number of preceding periods;
(g) A limit on how much the applicable value of all assets, groups of assets, or individual assets may decrease below:
(i) The corresponding applicable value for the preceding period; or
(ii) A mathematical blend of applicable values over a stated number of preceding periods;
(h) The treatment of accrued income and other features of an asset which affect value; and
(i) Determining the liabilities of the trust, including treatment of liabilities to conform with the treatment of assets under (a) through (h) of this subsection (2).
[ 2021 c 140 s 2307.]

catchline: Unitrusts—Applicable value.


title: RCW 11.104B.170

text:
(1) A unitrust policy must provide the period used under RCW 11.104B.150 and 11.104B.160. Except as otherwise provided in RCW 11.104B.180(2)(c), the period may be:
(a) A calendar year;
(b) A 12-month period other than a calendar year;
(c) A calendar quarter;
(d) A three-month period other than a calendar quarter; or
(e) Another period.
(2) Except as otherwise provided in RCW 11.104B.180(2), a unitrust policy may provide standards for:
(a) Using fewer preceding periods under RCW 11.104B.150 (1)(b)(ii) or (2)(c) or (d) if:
(i) The trust was not in existence in a preceding period; or
(ii) Market indices or other published data are not available for a preceding period;
(b) Using fewer preceding periods under RCW 11.104B.160(2) (e)(i) or (ii), (f)(ii), or (g)(ii) if:
(i) The trust was not in existence in a preceding period; or
(ii) Fair market values are not available for a preceding period; and
(c) Prorating the unitrust amount on a daily basis for a part of a period in which the trust or the administration of the trust as a unitrust or the interest of any beneficiary commences or terminates.
[ 2021 c 140 s 2308.]

catchline: Unitrusts—Period.


title: RCW 11.104B.180

text:
(1) A unitrust policy may:
(a) Provide methods and standards for:
(i) Determining the timing of distributions;
(ii) Making distributions in cash or in-kind or partly in cash and partly in-kind; or
(iii) Correcting an underpayment or overpayment to a beneficiary based on the unitrust amount if there is an error in calculating the unitrust amount;
(b) Specify sources and the order of sources, including categories of income for federal income tax purposes, from which distributions of a unitrust amount are paid; or
(c) Provide other standards and rules the fiduciary determines serve the interests of the beneficiaries.
(2) If a trust qualifies for a special tax benefit or a fiduciary is not an independent person:
(a) The unitrust rate established under RCW 11.104B.150 may not be less than three percent or more than five percent;
(b) The only provisions of RCW 11.104B.160 that apply are RCW 11.104B.160 (1) and (2)(a), (d), (e)(i), and (i);
(c) The only period that may be used under RCW 11.104B.170 is a calendar year under RCW 11.104B.170(1)(a); and
(d) The only other provisions of RCW 11.104B.170 that apply are RCW 11.104B.170(2) (b)(i) and (c).
[ 2021 c 140 s 2309.]

catchline: Unitrust—Special tax benefits—Other rules.


title: RCW 11.104B.200

text:
(1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Capital distribution" means an entity distribution of money that is a:
(i) Return of capital; or
(ii) Distribution in total or partial liquidation of the entity.
(b) "Entity":
(i) Means a corporation, partnership, limited liability company, regulated investment company, real estate investment trust, common trust fund, or any other organization or arrangement in which a fiduciary owns or holds an interest, whether or not the entity is a taxpayer for federal income tax purposes; and
(ii) Does not include:
(A) A trust or estate to which RCW 11.104B.210 applies;
(B) A business or other activity to which RCW 11.104B.220 applies, which is not conducted by an entity described in (b)(i) of this subsection (1);
(C) An asset-backed security; or
(D) An instrument or arrangement to which RCW 11.104B.350 applies.
(c) "Entity distribution" means a payment or transfer by an entity made to a person in the person's capacity as an owner or holder of an interest in the entity.
(2) In this section, an attribute or action of an entity includes an attribute or action of any other entity in which the entity owns or holds an interest, including an interest owned or held indirectly through another entity.
(3) Except as otherwise provided in subsection (4)(b) through (d) of this section, a fiduciary shall allocate to income:
(a) Money received in an entity distribution; and
(b) Tangible personal property of nominal value received from the entity.
(4) A fiduciary shall allocate to principal:
(a) Property received in an entity distribution which is not:
(i) Money; or
(ii) Tangible personal property of nominal value;
(b) Money received in an entity distribution in an exchange for part or all of the fiduciary's interest in the entity, to the extent the entity distribution reduces the fiduciary's interest in the entity relative to the interests of other persons that own or hold interests in the entity;
(c) Money received in an entity distribution that the fiduciary determines or estimates is a capital distribution; and
(d) Money received in an entity distribution from an entity that is:
(i) A regulated investment company or real estate investment trust if the money received is a capital gain dividend for federal income tax purposes; or
(ii) Treated for federal income tax purposes comparably to the treatment described in (d)(i) of this subsection (4).
(5) A fiduciary may determine or estimate that money received in an entity distribution is a capital distribution:
(a) By relying without inquiry or investigation on a characterization of the entity distribution provided by or on behalf of the entity, unless the fiduciary:
(i) Determines, on the basis of information known to the fiduciary, that the characterization is or may be incorrect; or
(ii) Owns or holds more than 50 percent of the voting interest in the entity;
(b) By determining or estimating, on the basis of information known to the fiduciary or provided to the fiduciary by or on behalf of the entity, that the total amount of money and property received by the fiduciary in the entity distribution or a series of related entity distributions is or will be greater than 20 percent of the fair market value of the fiduciary's interest in the entity; or
(c) If neither (a) or (b) of this subsection (5) applies, by considering the factors in subsection (6) of this section and the information known to the fiduciary or provided to the fiduciary by or on behalf of the entity.
(6) In making a determination or estimate under subsection (5)(c) of this section, a fiduciary may consider:
(a) A characterization of an entity distribution provided by or on behalf of the entity;
(b) The amount of money or property received in:
(i) The entity distribution; or
(ii) What the fiduciary determines is or will be a series of related entity distributions;
(c) The amount described in (b) of this subsection compared to the amount the fiduciary determines or estimates is, during the current or preceding accounting periods:
(i) The entity's operating income;
(ii) The proceeds of the entity's sale or other disposition of:
(A) All or part of the business or other activity conducted by the entity;
(B) One or more business assets that are not sold to customers in the ordinary course of the business or other activity conducted by the entity; or
(C) One or more assets other than business assets, unless the entity's primary activity is to invest in assets to realize gain on the disposition of all or some of the assets;
(iii) If the entity's primary activity is to invest in assets to realize gain on the disposition of all or some of the assets, the gain realized on the disposition;
(iv) The entity's regular, periodic entity distributions;
(v) The amount of money the entity has accumulated;
(vi) The amount of money the entity has borrowed;
(vii) The amount of money the entity has received from the sources described in RCW 11.104B.260, 11.104B.290, 11.104B.300, and 11.104B.310; and
(viii) The amount of money the entity has received from a source not otherwise described in this subsection; and
(d) Any other factor the fiduciary determines is relevant.
(7) If, after applying subsections (3) through (6) of this section, a fiduciary determines that a part of an entity distribution is a capital distribution but is in doubt about the amount of the entity distribution which is a capital distribution, the fiduciary shall allocate to principal the amount of the entity distribution which is in doubt.
(8) If a fiduciary receives additional information about the application of this section to an entity distribution before the fiduciary has paid part of the entity distribution to a beneficiary, the fiduciary may consider the additional information before making the payment to the beneficiary and may change a decision to make the payment to the beneficiary.
(9) If a fiduciary receives additional information about the application of this section to an entity distribution after the fiduciary has paid part of the entity distribution to a beneficiary, the fiduciary is not required to change or recover the payment to the beneficiary but may consider that information in determining whether to exercise the power to adjust under RCW 11.104B.070.
[ 2021 c 140 s 2401.]

catchline: Receipts from entities—Character.


title: RCW 11.104B.210

text:
A fiduciary shall allocate to income an amount received as a distribution of income, including a unitrust distribution under Article 3 of this chapter, from a trust or estate in which the fiduciary has an interest, other than an interest the fiduciary purchased in a trust that is an investment entity, and shall allocate to principal an amount received as a distribution of principal from the trust or estate. If a fiduciary purchases, or receives from a settlor, an interest in a trust that is an investment entity, RCW 11.104B.200, 11.104B.340, or 11.104B.350 applies to a receipt from the trust.
[ 2021 c 140 s 2402.]

catchline: Receipts from entities—Distributions from trusts and estates.


title: RCW 11.104B.220

text:
(1) This section applies to a business or other activity conducted by a fiduciary if the fiduciary determines that it is in the interests of the beneficiaries to account separately for the business or other activity instead of:
(a) Accounting for the business or other activity as part of the fiduciary's general accounting records; or
(b) Conducting the business or other activity through an entity described in RCW 11.104B.200(1)(b)(i).
(2) A fiduciary may account separately under this section for the transactions of a business or other activity, whether or not assets of the business or other activity are segregated from other assets held by the fiduciary.
(3) A fiduciary that accounts separately under this section for a business or other activity:
(a) May determine:
(i) The extent to which the net cash receipts of the business or other activity must be retained for:
(A) Working capital;
(B) The acquisition or replacement of fixed assets; and
(C) Other reasonably foreseeable needs of the business or other activity; and
(ii) The extent to which the remaining net cash receipts are accounted for as principal or income in the fiduciary's general accounting records for the trust;
(b) May make a determination under (a) of this subsection (3) separately and differently from the fiduciary's decisions concerning distributions of income or principal; and
(c) Shall account for the net amount received from the sale of an asset of the business or other activity, other than a sale in the ordinary course of the business or other activity, as principal in the fiduciary's general accounting records for the trust, to the extent the fiduciary determines that the net amount received is no longer required in the conduct of the business or other activity.
(4) Activities for which a fiduciary may account separately under this section include:
(a) Retail, manufacturing, service, and other traditional business activities;
(b) Farming;
(c) Raising and selling livestock and other animals;
(d) Managing rental properties;
(e) Extracting minerals, water, and other natural resources;
(f) Growing and cutting timber;
(g) An activity to which RCW 11.104B.330, 11.104B.340, or 11.104B.350 applies; and
(h) Any other business conducted by the fiduciary.
[ 2021 c 140 s 2403.]

catchline: Receipts from entities—Businesses and other activities conducted by fiduciary.


title: RCW 11.104B.230

text:
A fiduciary shall allocate to principal:
(1) To the extent not allocated to income under this chapter, an asset received from:
(a) An individual during the individual's lifetime;
(b) An estate;
(c) A trust on termination of an income interest; or
(d) A payor under a contract naming the fiduciary as beneficiary;
(2) Except as otherwise provided in this article, money or other property received from the sale, exchange, liquidation, or change in form of a principal asset;
(3) An amount recovered from a third party to reimburse the fiduciary because of a disbursement described in RCW 11.104B.410(1) or for another reason to the extent not based on loss of income;
(4) Proceeds of property taken by eminent domain, except that proceeds awarded for loss of income in an accounting period are income if a current income beneficiary had a mandatory income interest during the period;
(5) Net income received in an accounting period during which there is no beneficiary to which a fiduciary may or must distribute income; and
(6) Other receipts as provided in RCW 11.104B.270 through 11.104B.350.
[ 2021 c 140 s 2404.]

catchline: Receipts not normally apportioned—Principal receipts.


title: RCW 11.104B.240

text:
To the extent a fiduciary does not account for the management of rental property as a business under RCW 11.104B.220, the fiduciary shall allocate to income an amount received as rent of real or personal property, including an amount received for cancellation or renewal of a lease. An amount received as a refundable deposit, including a security deposit or a deposit that is to be applied as rent for future periods:
(1) Must be added to principal and held subject to the terms of the lease, except as otherwise provided by law other than this chapter; and
(2) Is not allocated to income or available for distribution to a beneficiary until the fiduciary's contractual obligations have been satisfied with respect to that amount.
[ 2021 c 140 s 2405.]

catchline: Receipts not normally apportioned—Rental property.


title: RCW 11.104B.250

text:
(1) This section does not apply to an obligation to which RCW 11.104B.280, 11.104B.290, 11.104B.300, 11.104B.310, 11.104B.330, 11.104B.340, or 11.104B.350 applies.
(2) A fiduciary shall allocate to income, without provision for amortization of premium, an amount received as interest on an obligation to pay money to the fiduciary, including an amount received as consideration for prepaying principal.
(3) A fiduciary shall allocate to principal an amount received from the sale, redemption, or other disposition of an obligation to pay money to the fiduciary. A fiduciary shall allocate to income the increment in value of a bond or other obligation for the payment of money bearing no stated interest but payable or redeemable, at maturity or another future time, in an amount that exceeds the amount in consideration of which it was issued.
[ 2021 c 140 s 2406.]

catchline: Receipts not normally apportioned—Receipt on obligation to be paid in money.


title: RCW 11.104B.260

text:
(1) This section does not apply to a contract to which RCW 11.104B.280 applies.
(2) Except as otherwise provided in subsection (3) of this section, a fiduciary shall allocate to principal the proceeds of a life insurance policy or other contract received by the fiduciary as beneficiary, including a contract that insures against damage to, destruction of, or loss of title to an asset. The fiduciary shall allocate dividends on an insurance policy to income to the extent premiums on the policy are paid from income and to principal to the extent premiums on the policy are paid from principal.
(3) A fiduciary shall allocate to income proceeds of a contract that insures the fiduciary against loss of:
(a) Occupancy or other use by a current income beneficiary;
(b) Income; or
(c) Subject to RCW 11.104B.220, profits from a business.
[ 2021 c 140 s 2407.]

catchline: Receipts not normally apportioned—Insurance policies and contracts.


title: RCW 11.104B.270

text:
(1) If a fiduciary determines that an allocation between income and principal required by RCW 11.104B.280, 11.104B.290, 11.104B.300, 11.104B.310, or 11.104B.340 is insubstantial, the fiduciary may allocate the entire amount to principal, unless RCW 11.104B.070(5) applies to the allocation.
(2) A fiduciary may presume an allocation is insubstantial under subsection (1) of this section if:
(a) The amount of the allocation would increase or decrease net income in an accounting period, as determined before the allocation, by less than 10 percent; and
(b) The asset producing the receipt to be allocated has a fair market value less than 10 percent of the total fair market value of the assets owned or held by the fiduciary at the beginning of the accounting period.
(3) The power to make a determination under subsection (1) of this section may be:
(a) Exercised by a cofiduciary in the manner described in RCW 11.104B.070(6); or
(b) Released or delegated for a reason described in RCW 11.104B.070(7) and in the manner described in RCW 11.104B.070(8).
[ 2021 c 140 s 2408.]

catchline: Receipts normally apportioned—Insubstantial allocation not required.


title: RCW 11.104B.280

text:
(1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Internal income of a separate fund" means the amount determined under subsection (2) of this section.
(b) "Marital trust" means a trust:
(i) Of which the settlor's surviving spouse is the only current income beneficiary and is entitled to a distribution of all the current net income of the trust; and
(ii) That qualifies for a marital deduction with respect to the settlor's estate under 26 U.S.C. Sec. 2056 of the federal internal revenue code of 1986, as amended, as of January 1, 2022, because:
(A) An election to qualify for a marital deduction under 26 U.S.C. Sec. 2056(b)(7) of the federal internal revenue code of 1986, as amended, as of January 1, 2022, has been made; or
(B) The trust qualifies for a marital deduction under 26 U.S.C. Sec. 2056(b)(5) of the federal internal revenue code of 1986, as amended, as of January 1, 2022.
(c) "Payment" means an amount a fiduciary may receive over a fixed number of years or during the life of one or more individuals because of services rendered or property transferred to the payor in exchange for future amounts the fiduciary may receive. The term includes an amount received in money or property from the payor's general assets or from a separate fund created by the payor.
(d) "Separate fund" includes a private or commercial annuity, an individual retirement account, and a pension, profit-sharing, stock bonus, or stock ownership plan.
(2) For each accounting period, the following rules apply to a separate fund:
(a) The fiduciary shall determine the internal income of the separate fund as if the separate fund were a trust subject to this chapter.
(b) If the fiduciary cannot determine the internal income of the separate fund under (a) of this subsection (2), the internal income of the separate fund is deemed to equal four percent of the value of the separate fund, according to the most recent statement of value preceding the beginning of the accounting period.
(c) If the fiduciary cannot determine the value of the separate fund under (b) of this subsection (2), the value of the separate fund is deemed to equal the present value of the expected future payments, as determined under 26 U.S.C. Sec. 7520 of the federal internal revenue code of 1986, as amended, as of January 1, 2022, for the month preceding the beginning of the accounting period for which the computation is made.
(3) A fiduciary shall allocate a payment received from a separate fund during an accounting period to income, to the extent of the internal income of the separate fund during the period, and the balance to principal.
(4) The fiduciary of a marital trust shall:
(a) Withdraw from a separate fund the amount the current income beneficiary of the trust requests the fiduciary to withdraw, not greater than the amount by which the internal income of the separate fund during the accounting period exceeds the amount the fiduciary otherwise receives from the separate fund during the period;
(b) Transfer from principal to income the amount the current income beneficiary requests the fiduciary to transfer, not greater than the amount by which the internal income of the separate fund during the period exceeds the amount the fiduciary receives from the separate fund during the period after the application of (a) of this subsection (2) [(4)]; and
(c) Distribute to the current income beneficiary as income:
(i) The amount of the internal income of the separate fund received or withdrawn during the period; and
(ii) The amount transferred from principal to income under (b) of this subsection (2) [(4)].
(5) For a trust, other than a marital trust, of which one or more current income beneficiaries are entitled to a distribution of all the current net income, the fiduciary shall transfer from principal to income the amount by which the internal income of a separate fund during the accounting period exceeds the amount the fiduciary receives from the separate fund during the period.
[ 2021 c 140 s 2409.]

catchline: Receipts normally apportioned—Deferred compensation, annuities, and similar payments.


title: RCW 11.104B.290

text:
(1) In this section, "liquidating asset" means an asset whose value will diminish or terminate because the asset is expected to produce receipts for a limited time. The term includes a leasehold, patent, copyright, royalty right, and right to receive payments during a period of more than one year under an arrangement that does not provide for the payment of interest on the unpaid balance.
(2) This section does not apply to a receipt subject to RCW 11.104B.200, 11.104B.280, 11.104B.300, 11.104B.310, 11.104B.330, 11.104B.340, 11.104B.350, or 11.104B.420.
(3) A fiduciary shall allocate to income 10 percent of the receipts from a liquidating asset and the balance to principal.
[ 2021 c 140 s 2410.]

catchline: Receipts normally apportioned—Liquidating assets.


title: RCW 11.104B.300

text:
(1) To the extent a fiduciary accounts for a receipt from an interest in minerals, water, or other natural resources pursuant to this section, the fiduciary shall allocate the receipt:
(a) If received as nominal delay rental or nominal annual rent on a lease, a receipt must be allocated to income;
(b) If received from a production payment, a receipt must be allocated to income if and to the extent that the agreement creating the production payment provides a factor for interest or its equivalent. The balance must be allocated to principal;
(c) If an amount received as a royalty, shut-in-well payment, take-or-pay payment, bonus, or delay rental is more than nominal, 90 percent must be allocated to principal and the balance to income; or
(d) If an amount is received from a working interest or any other interest not provided for in (a), (b), or (c) of this subsection, 90 percent of the net amount received must be allocated to principal and the balance to income.
(2) An amount received on account of an interest in water that is renewable must be allocated to income. If the water is not renewable, 90 percent of the amount must be allocated to principal and the balance to income.
(3) This chapter applies whether or not a decedent or donor was extracting minerals, water, or other natural resources before the interest became subject to the trust.
(4) If a fiduciary owns or holds an interest in minerals, water, or other natural resources on January 1, 2022, the fiduciary may allocate receipts from the interest as provided in this chapter or in the manner used by the fiduciary before January 1, 2022. If the fiduciary acquires an interest in minerals, water, or other natural resources after January 1, 2022, the fiduciary shall allocate receipts from the interest as provided in this chapter.
[ 2021 c 140 s 2411.]

catchline: Receipts normally apportioned—Minerals, water, and other natural resources.


title: RCW 11.104B.310

text:
(1) To the extent a fiduciary does not account for receipts from the sale of timber and related products as a business under RCW 11.104B.220, the fiduciary shall allocate the net receipts:
(a) To income, to the extent the amount of timber cut from the land does not exceed the rate of growth of the timber;
(b) To principal, to the extent the amount of timber cut from the land exceeds the rate of growth of the timber or the net receipts are from the sale of standing timber;
(c) Between income and principal if the net receipts are from the lease of land used for growing and cutting timber or from a contract to cut timber from land, by determining the amount of timber cut from the land under the lease or contract and applying the rules in (a) or (b) of this subsection; or
(d) To principal, to the extent advance payments, bonuses, and other payments are not allocated under (a), (b), or (c) of this subsection.
(2) In determining net receipts to be allocated under subsection (1) of this section, a fiduciary shall deduct and transfer to principal a reasonable amount for depletion.
(3) This section applies to land owned or held by a fiduciary whether or not a settlor was cutting timber from the land before the fiduciary owned or held the property.
(4) If a fiduciary owns or holds an interest in land used for growing and cutting timber before January 1, 2022, the fiduciary may allocate net receipts from the sale of timber and related products as provided in this section or in the manner used by the fiduciary before January 1, 2022. If the fiduciary acquires an interest in land used for growing and cutting timber on or after January 1, 2022, the fiduciary shall allocate net receipts from the sale of timber and related products as provided in this section.
[ 2021 c 140 s 2412.]

catchline: Receipts normally apportioned—Timber.


title: RCW 11.104B.320

text:
(1) If a trust received property for which a gift or estate tax marital deduction was allowed and the settlor's spouse holds a mandatory income interest in the trust, the spouse may require the trustee, to the extent the trust assets otherwise do not provide the spouse with sufficient income from or use of the trust assets to qualify for the deduction, to:
(a) Make property productive of income;
(b) Convert property to property productive of income within a reasonable time; or
(c) Exercise the power to adjust under RCW 11.104B.070.
(2) The trustee may decide which action or combination of actions in subsection (1) of this section to take.
[ 2021 c 140 s 2413.]

catchline: Receipts normally apportioned—Marital deduction property not productive of income.


title: RCW 11.104B.330

text:
(1) In this section, "derivative" means a contract, instrument, other arrangement, or combination of contracts, instruments, or other arrangements, the value, rights, and obligations of which are, in whole or in part, dependent on or derived from an underlying tangible or intangible asset, group of tangible or intangible assets, index, or occurrence of an event. The term includes stocks, fixed income securities, and financial instruments and arrangements based on indices, commodities, interest rates, weather-related events, and credit default events.
(2) To the extent a fiduciary does not account for a transaction in derivatives as a business under RCW 11.104B.220, the fiduciary shall allocate all receipts from the transaction and all disbursements made in connection with the transaction to principal.
(3) Subsection (4) of this section applies if:
(a) A fiduciary:
(i) Grants an option to buy property from a trust, whether or not the trust owns the property when the option is granted;
(ii) Grants an option that permits another person to sell property to the trust; or
(iii) Acquires an option to buy property for the trust or an option to sell an asset owned by the trust; and
(b) The fiduciary or other owner of the asset is required to deliver the asset if the option is exercised.
(4) If this subsection applies, the fiduciary shall allocate 10 percent to income and the balance to principal of the following amounts:
(a) An amount received for granting the option;
(b) An amount paid to acquire the option; and
(c) Gain or loss realized on the exercise, exchange, settlement, offset, closing, or expiration of the option.
[ 2021 c 140 s 2414.]

catchline: Receipts normally apportioned—Derivatives and options.


title: RCW 11.104B.340

text:
(1) If a fiduciary receives a payment from interest or other current return and from other proceeds of the collateral financial assets, the fiduciary shall allocate to income the portion of the payment which the payer identifies as being from interest or other current return and shall allocate the balance of the payment to principal.
(2) If a fiduciary receives one or more payments in exchange for the fiduciary's entire interest in an asset-backed security in one accounting period, the fiduciary shall allocate the payments to principal. If a payment is one of a series of payments that will result in the liquidation of the trust's interest in the security over more than one accounting period, the fiduciary shall allocate 10 percent of the payment to income and the balance to principal.
[ 2021 c 140 s 2415.]

catchline: Receipts normally apportioned—Asset-backed securities.


title: RCW 11.104B.350

text:
A fiduciary shall allocate receipts from or related to a financial instrument or arrangement not otherwise addressed by this chapter. The allocation must be consistent with RCW 11.104B.330 and 11.104B.340.
[ 2021 c 140 s 2416.]

catchline: Receipts normally apportioned—Other financial instruments and arrangements.


title: RCW 11.104B.400

text:
Subject to RCW 11.104B.430, and except as otherwise provided in RCW 11.104B.500(3) (b) or (c), a fiduciary shall disburse from income:
(1) One-half of:
(a) The regular compensation of the fiduciary and any person providing investment advisory, custodial, or other services to the fiduciary, to the extent income is sufficient; and
(b) An expense for an accounting, judicial or nonjudicial proceeding, or other matter that involves both income and successive interests, to the extent income is sufficient;
(2) The balance of the disbursements described in subsection (1) of this section, to the extent a fiduciary that is an independent person determines that making those disbursements from income would be in the interests of the beneficiaries;
(3) Another ordinary expense incurred in connection with administration, management, or preservation of property and distribution of income, including interest, an ordinary repair, regularly recurring tax assessed against principal, and an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily an income interest, to the extent income is sufficient; and
(4) A premium on insurance covering loss of a principal asset or income from or use of the asset.
[ 2021 c 140 s 2501.]

catchline: Disbursements—Disbursement from income.


title: RCW 11.104B.410

text:
(1) Subject to RCW 11.104B.440, and except as otherwise provided in RCW 11.104B.500(3)(b), a fiduciary shall disburse from principal:
(a) The balance of the disbursements described in RCW 11.104B.400 (1) and (3) after application of RCW 11.104B.400(2);
(b) The fiduciary's compensation calculated on principal as a fee for acceptance, distribution, or termination;
(c) A payment of an expense to prepare for or execute a sale or other disposition of property;
(d) A payment on the principal of a trust debt;
(e) A payment of an expense of an accounting, judicial or nonjudicial proceeding, or other matter that involves primarily principal, including a proceeding to construe the terms of the trust or protect property;
(f) A payment of a premium for insurance, including title insurance, not described in RCW 11.104B.400(4), of which the fiduciary is the owner and beneficiary;
(g) A payment of an estate or inheritance tax or other tax imposed because of the death of a decedent, including penalties, apportioned to the trust; and
(h) A payment:
(i) Related to environmental matters, including:
(A) Reclamation;
(B) Assessing environmental conditions;
(C) Remedying and removing environmental contamination;
(D) Monitoring remedial activities and the release of substances;
(E) Preventing future releases of substances;
(F) Collecting amounts from persons liable or potentially liable for the costs of activities described in (h)(i)(A) through (E) of this subsection (1);
(G) Penalties imposed under environmental laws or regulations;
(H) Other actions to comply with environmental laws or regulations;
(I) Statutory or common law claims by third parties; and
(J) Defending claims based on environmental matters; and
(ii) For a premium for insurance for matters described in (h)(i) of this subsection (1).
(2) If a principal asset is encumbered with an obligation that requires income from the asset to be paid directly to a creditor, the fiduciary shall transfer from principal to income an amount equal to the income paid to the creditor in reduction of the principal balance of the obligation.
[ 2021 c 140 s 2502.]


title: RCW 11.104B.420

text:
(1) In this section, "depreciation" means a reduction in value due to wear, tear, decay, corrosion, or gradual obsolescence of a tangible asset having a useful life of more than one year.
(2) A fiduciary may transfer to principal a reasonable amount of the net cash receipts from a principal asset that is subject to depreciation, but may not transfer any amount for depreciation:
(a) Of the part of real property used or available for use by a beneficiary as a residence;
(b) Of tangible personal property held or made available for the personal use or enjoyment of a beneficiary; or
(c) Under this section, to the extent the fiduciary accounts:
(i) Under RCW 11.104B.290 for the asset; or
(ii) Under RCW 11.104B.220 for the business or other activity in which the asset is used.
(3) An amount transferred to principal under this section need not be separately held.
[ 2021 c 140 s 2503.]

catchline: Disbursements—Transfer from income to principal for depreciation.


title: RCW 11.104B.430

text:
(1) If a fiduciary makes or expects to make an income disbursement described in subsection (2) of this section, the fiduciary may transfer an appropriate amount from principal to income in one or more accounting periods to reimburse income.
(2) To the extent the fiduciary has not been and does not expect to be reimbursed by a third party, income disbursements to which subsection (1) of this section applies include:
(a) An amount chargeable to principal but paid from income because principal is illiquid;
(b) A disbursement made to prepare property for sale, including improvements and commissions; and
(c) A disbursement described in RCW 11.104B.410(1).
(3) If an asset whose ownership gives rise to an income disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subsection (1) of this section.
[ 2021 c 140 s 2504.]

catchline: Disbursements—Reimbursement of income from principal.


title: RCW 11.104B.440

text:
(1) If a fiduciary makes or expects to make a principal disbursement described in subsection (2) of this section, the fiduciary may transfer an appropriate amount from income to principal in one or more accounting periods to reimburse principal or provide a reserve for future principal disbursements.
(2) To the extent a fiduciary has not been and does not expect to be reimbursed by a third party, principal disbursements to which subsection (1) of this section applies include:
(a) An amount chargeable to income but paid from principal because income is not sufficient;
(b) The cost of an improvement to principal, whether a change to an existing asset or the construction of a new asset, including a special assessment;
(c) A disbursement made to prepare property for rental, including tenant allowances, leasehold improvements, and commissions;
(d) A periodic payment on an obligation secured by a principal asset, to the extent the amount transferred from income to principal for depreciation is less than the periodic payment; and
(e) A disbursement described in RCW 11.104B.410(1).
(3) If an asset whose ownership gives rise to a principal disbursement becomes subject to a successive interest after an income interest ends, the fiduciary may continue to make transfers under subsection (1) of this section.
[ 2021 c 140 s 2505.]

catchline: Disbursements—Reimbursement of principal from income.


title: RCW 11.104B.450

text:
(1) A tax required to be paid by a fiduciary based on receipts allocated to income must be charged to income.
(2) A tax required to be paid by a fiduciary based on receipts allocated to principal must be charged to principal, even if the tax is called an income tax by the taxing authority.
(3) A tax required to be paid by a fiduciary on a share of an entity's taxable income must be charged:
(a) To income to the extent that receipts from the entity are allocated only to income;
(b) To principal to the extent that receipts from the entity are allocated only to principal;
(c) Proportionately to income and principal to the extent that receipts from the entity are allocated to both income and principal.
(4) Before applying subsections (1) through (3) of this section, the trustee must adjust income or principal receipts by the distributions to a beneficiary for which the trust receives an income tax deduction.
[ 2021 c 140 s 2506.]

catchline: Disbursements—Income taxes.


title: RCW 11.104B.460

text:
(1) A fiduciary may make an adjustment between income and principal to offset the shifting of economic interests or tax benefits between current income beneficiaries and successor beneficiaries which arises from:
(a) An election or decision the fiduciary makes regarding a tax matter, other than a decision to claim an income tax deduction to which subsection (2) of this section applies;
(b) An income tax or other tax imposed on the fiduciary or a beneficiary as a result of a transaction involving the fiduciary or a distribution by the fiduciary; or
(c) Ownership by the fiduciary of an interest in an entity a part of whose taxable income, whether or not distributed, is includable in the taxable income of the fiduciary or a beneficiary.
(2) If the amount of an estate tax marital or charitable deduction is reduced because a fiduciary deducts an amount paid from principal for income tax purposes instead of deducting it for estate tax purposes and, as a result, estate taxes paid from principal are increased and income taxes paid by the fiduciary or a beneficiary are decreased, the fiduciary shall charge each beneficiary that benefits from the decrease in income tax to reimburse the principal from which the increase in estate tax is paid. The total reimbursement must equal the increase in the estate tax, to the extent the principal used to pay the increase would have qualified for a marital or charitable deduction but for the payment. The share of the reimbursement for each fiduciary or beneficiary whose income taxes are reduced must be the same as its share of the total decrease in income tax.
(3) A fiduciary that charges a beneficiary under subsection (2) of this section may offset the charge by obtaining payment from the beneficiary, withholding an amount from future distributions to the beneficiary, or adopting another method or combination of methods.
[ 2021 c 140 s 2507.]

catchline: Disbursements—Adjustment between income and principal because of taxes.


title: RCW 11.104B.500

text:
(1) This section applies when:
(a) The death of an individual results in the creation of an estate or trust; or
(b) An income interest in a trust terminates, whether the trust continues or is distributed.
(2) A fiduciary of an estate or trust with an income interest that terminates shall determine, under subsection (7) of this section and Articles 4, 5, and 7 of this chapter, the amount of net income and net principal receipts received from property specifically given to a beneficiary. The fiduciary shall distribute the net income and net principal receipts to the beneficiary that is to receive the specific property.
(3) A fiduciary shall determine the income and net income of an estate or income interest in a trust which terminates, other than the amount of net income determined under subsection (2) of this section, under Articles 4, 5, and 7 of this chapter and by:
(a) Including in net income all income from property used or sold to discharge liabilities;
(b) Paying from income or principal, in the fiduciary's discretion, fees of attorneys, accountants, and fiduciaries, court costs and other expenses of administration, and interest on estate and inheritance taxes and other taxes imposed because of the decedent's death, but the fiduciary may pay the expenses from income of property passing to a trust for which the fiduciary claims a federal estate tax marital or charitable deduction only to the extent:
(i) The payment of the expenses from income will not cause the reduction or loss of the deduction; or
(ii) The fiduciary makes an adjustment under RCW 11.104B.460(2); and
(c) Paying from principal other disbursements made or incurred in connection with the settlement of the estate or the winding up of an income interest that terminates, including:
(i) To the extent authorized by the decedent's will, the terms of the trust, or applicable law, debts, funeral expenses, disposition of remains, family allowances, estate and inheritance taxes, and other taxes imposed because of the decedent's death; and
(ii) Related penalties that are apportioned, by the decedent's will, the terms of the trust, or applicable law, to the estate or income interest that terminates.
(4) If a decedent's will, the terms of a trust, or applicable law provides for the payment of interest or the equivalent of interest to a beneficiary that receives a pecuniary amount outright, the fiduciary shall make the payment from net income determined under subsection (3) of this section or from principal to the extent net income is insufficient.
(5) If a beneficiary is to receive a pecuniary amount outright from a trust after an income interest ends because of an income beneficiary's death, and no payment of interest or the equivalent of interest is provided for by the terms of the trust or applicable law, the fiduciary shall pay the interest or the equivalent of interest to which the beneficiary would be entitled under applicable law if the pecuniary amount were required to be paid under a will.
(6) A fiduciary shall distribute net income remaining after payments required by subsections (4) and (5) of this section in the manner described in RCW 11.104B.510 to all other beneficiaries, including a beneficiary that receives a pecuniary amount in trust, even if the beneficiary holds an unqualified power to withdraw assets from the trust or other presently exercisable general power of appointment over the trust.
(7) A fiduciary may not reduce principal or income receipts from property described in subsection (2) of this section because of a payment described in RCW 11.104B.400 or 11.104B.410, to the extent the decedent's will, the terms of the trust, or applicable law requires the fiduciary to make the payment from assets other than the property or to the extent the fiduciary recovers or expects to recover the payment from a third party. The net income and principal receipts from the property must be determined by including the amount the fiduciary receives or pays regarding the property, whether the amount accrued or became due before, on, or after the date of the decedent's death or an income interest's terminating event, and making a reasonable provision for an amount the estate or income interest may become obligated to pay after the property is distributed.
[ 2021 c 140 s 2601.]

catchline: Death or termination of interest—Determination and distribution of net income.


title: RCW 11.104B.510

text:
(1) Except to the extent Article 3 of this chapter applies for a beneficiary that is a trust, each beneficiary described in RCW 11.104B.500(6) is entitled to receive a share of the net income equal to the beneficiary's fractional interest in undistributed principal assets, using values as of the distribution date. If a fiduciary makes more than one distribution of assets to beneficiaries to which this section applies, each beneficiary, including a beneficiary that does not receive part of the distribution, is entitled, as of each distribution date, to a share of the net income the fiduciary received after the decedent's death, an income interest's other terminating event, or the preceding distribution by the fiduciary.
(2) In determining a beneficiary's share of net income under subsection (1) of this section, the following rules apply:
(a) The beneficiary is entitled to receive a share of the net income equal to the beneficiary's fractional interest in the undistributed principal assets immediately before the distribution date.
(b) The beneficiary's fractional interest under (a) of this subsection must be calculated:
(i) On the aggregate value of the assets as of the distribution date without reducing the value by any unpaid principal obligation; and
(ii) Without regard to:
(A) Property specifically given to a beneficiary under the decedent's will or the terms of the trust; and
(B) Property required to pay pecuniary amounts not in trust.
(c) The distribution date under (a) of this subsection may be the date as of which the fiduciary calculates the value of the assets if that date is reasonably near the date on which the assets are distributed.
(3) To the extent a fiduciary does not distribute under this section all the collected but undistributed net income to each beneficiary as of a distribution date, the fiduciary shall maintain records showing the interest of each beneficiary in the net income.
(4) If this section applies to income from an asset, a fiduciary may apply the rules in this section to net gain or loss realized from the disposition of the asset after the decedent's death, an income interest's terminating event, or the preceding distribution by the fiduciary.
[ 2021 c 140 s 2602.]

catchline: Death or termination of interest—Distribution to successor beneficiary.


title: RCW 11.104B.550

text:
(1) An income beneficiary is entitled to net income in accordance with the terms of the trust from the date an income interest begins. The income interest begins on the date specified in the terms of the trust or, if no date is specified, on the date an asset becomes subject to:
(a) The trust for the current income beneficiary; or
(b) A successive interest for a successor beneficiary.
(2) An asset becomes subject to a trust under subsection (1)(a) of this section:
(a) For an asset that is transferred to the trust during the settlor's life, on the date the asset is transferred;
(b) For an asset that becomes subject to the trust because of a decedent's death, on the date of the decedent's death, even if there is an intervening period of administration of the decedent's estate; or
(c) For an asset that is transferred to a fiduciary by a third party because of a decedent's death, on the date of the decedent's death.
(3) An asset becomes subject to a successive interest under subsection (1)(b) of this section on the day after the preceding income interest ends, as determined under subsection (4) of this section, even if there is an intervening period of administration to wind up the preceding income interest.
(4) An income interest ends on the day before an income beneficiary dies or another terminating event occurs or on the last day of a period during which there is no beneficiary to which a fiduciary may or must distribute income.
[ 2021 c 140 s 2701.]

catchline: Death or termination of interest—When right to income begins and ends.


title: RCW 11.104B.560

text:
(1) A fiduciary shall allocate an income receipt or disbursement, other than a receipt to which RCW 11.104B.500(2) applies, to principal if its due date occurs before the date on which:
(a) For an estate, the decedent died; or
(b) For a trust or successive interest, an income interest begins.
(2) If the due date of a periodic income receipt or disbursement occurs on or after the date on which a decedent died or an income interest begins, a fiduciary shall allocate the receipt or disbursement to income.
(3) If an income receipt or disbursement is not periodic or has no due date, a fiduciary shall treat the receipt or disbursement under this section as accruing from day to day. The fiduciary shall allocate to principal the portion of the receipt or disbursement accruing before the date on which a decedent died or an income interest begins, and to income the balance.
(4) A receipt or disbursement is periodic under subsections (2) and (3) of this section if:
(a) The receipt or disbursement must be paid at regular intervals under an obligation to make payments; or
(b) The payor customarily makes payments at regular intervals.
(5) An item of income or obligation is due under this section on the date the payor is required to make a payment. If a payment date is not stated, there is no due date.
(6) Distributions to shareholders or other owners from an entity to which RCW 11.104B.200 applies are due:
(a) On the date fixed by or on behalf of the entity for determining the persons entitled to receive the distribution;
(b) If no date is fixed, on the date of the decision by or on behalf of the entity to make the distribution; or
(c) If no date is fixed and the fiduciary does not know the date of the decision by or on behalf of the entity to make the distribution, on the date the fiduciary learns of the decision.
[ 2021 c 140 s 2702.]

catchline: Death or termination of interest—Apportionment of receipts and disbursements when decedent dies or income interest begins.


title: RCW 11.104B.570

text:
(1) In this section, "undistributed income" means net income received on or before the date on which an income interest ends. The term does not include an item of income or expense which is due or accrued or net income that has been added or is required to be added to principal under the terms of the trust.
(2) Except as otherwise provided in subsection (3) of this section, when a mandatory income interest of a beneficiary ends, the fiduciary shall pay the beneficiary's share of the undistributed income that is not disposed of under the terms of the trust to the beneficiary or, if the beneficiary does not survive the date the interest ends, to the beneficiary's estate.
(3) If a beneficiary has an unqualified power to withdraw more than five percent of the value of a trust immediately before an income interest ends:
(a) The fiduciary shall allocate to principal the undistributed income from the portion of the trust which may be withdrawn; and
(b) Subsection (2) of this section applies only to the balance of the undistributed income.
(4) When a fiduciary's obligation to pay a fixed annuity or a fixed fraction of the value of assets ends, the fiduciary shall prorate the final payment as required to preserve an income tax, gift tax, estate tax, or other tax benefit.
[ 2021 c 140 s 2703.]

catchline: Death or termination of interest—Apportionment when income interest ends.


title: RCW 11.104B.900

text:
(1) In applying and construing this uniform act, consideration must be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.
(2) To the extent that this chapter is in conflict with RCW 11.68.090, RCW 11.68.090 prevails.
[ 2021 c 140 s 2801.]

catchline: Uniformity of application and construction.


title: RCW 11.104B.901

text:
This chapter modifies, limits, or supersedes the electronic signatures in global and national commerce act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or supersede section 101(c) of that act (15 U.S.C. Sec. 7001(c)) or authorize electronic delivery of any of the notices described in section 103(b) of that act (15 U.S.C. Sec. 7003(b)).
[ 2021 c 140 s 2802.]

catchline: Relation to electronic signatures in global and national commerce act.


title: RCW 11.104B.902

text:
This chapter applies to a trust or estate existing or created on or after January 1, 2022, except as otherwise expressly provided in the terms of the trust or RCW 11.104B.001 through 11.104B.901.
[ 2021 c 140 s 2803.]

catchline: Application.


title: RCW 11.104B.903

text:
Nothing in chapter 345, Laws of 2002 is intended to restrict the application of chapter 11.96A RCW to issues, questions, or disputes that arise under or that relate to chapter 345, Laws of 2002. Any and all such issues, questions, or disputes shall be resolved judicially or nonjudicially under chapter 11.96A RCW.
[ 2002 c 345 s 603. Formerly RCW 11.104A.901.]

catchline: Application of chapter 11.96A RCW.


title: RCW 11.104B.904

text:
For the purposes of this chapter, the terms spouse, marriage, marital, husband, wife, widow, widower, next of kin, and family shall be interpreted as applying equally to state registered domestic partnerships or individuals in state registered domestic partnerships as well as to marital relationships and married persons, and references to dissolution of marriage shall apply equally to state registered domestic partnerships that have been terminated, dissolved, or invalidated, to the extent that such interpretation does not conflict with federal law. Where necessary to implement chapter 521, Laws of 2009, gender-specific terms such as husband and wife used in any statute, rule, or other law shall be construed to be gender neutral, and applicable to individuals in state registered domestic partnerships.
[ 2009 c 521 s 40. Formerly RCW 11.104A.907.]

catchline: Construction—Chapter applicable to state registered domestic partnerships—2009 c 521.


title: RCW 11.104B.905

text:
Sections 2101 through 2806 of this act take effect January 1, 2022.
[ 2021 c 140 s 2809.]

catchline: Effective date—2021 c 140 ss 2101-2806.


title: RCW 11.106.010

text:
This chapter does not apply to resulting trusts, constructive trusts, business trusts where certificates of beneficial interest are issued to the beneficiaries, investment trusts, voting trusts, insurance trusts prior to the death of the insured, trusts in the nature of mortgages or pledges, liquidation trusts or trusts for the sole purpose of paying dividends, interest or interest coupons, salaries, wages or pensions; nor does this chapter apply to personal representatives.
[ 2013 c 272 s 25; 1985 c 30 s 95. Prior: 1984 c 149 s 128; 1955 c 33 s 30.30.010; prior: 1951 c 226 s 10. Formerly RCW 30.30.010.]
Notes:
Application—2013 c 272: See note following RCW 11.98.002.
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Scope of chapter—Exceptions.


title: RCW 11.106.020

text:
The trustee or trustees appointed by any will, deed, or agreement executed must mail or deliver at least annually to each permissible distributee, as defined in RCW 11.98.002, a written itemized statement of all current receipts and disbursements made by the trustee of the funds of the trust both principal and income, and upon the request of any such beneficiary must furnish the beneficiary an itemized statement of all property then held by that trustee, and may also file any such statement in the superior court of the county in which the trustee or one of the trustees resides.
[ 2013 c 272 s 26; 1985 c 30 s 96. Prior: 1984 c 149 s 129; 1955 c 33 s 30.30.020; prior: 1951 c 226 s 2. Formerly RCW 30.30.020.]
Notes:
Application—2013 c 272: See note following RCW 11.98.002.
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.
Trust provisions may relieve trustee from duty, restriction, or liability imposed by statute: RCW 11.97.010.

catchline: Trustee's annual statement.


title: RCW 11.106.030

text:
In addition to the statement required by RCW 11.106.020 any such trustee or trustees whenever it or they so desire, may file in the superior court of the county in which the trustees or one of the trustees resides an intermediate account under oath showing:
(1) The period covered by the account;
(2) The total principal with which the trustee is chargeable according to the last preceding account or the inventory if there is no preceding account;
(3) An itemized statement of all principal funds received and disbursed during such period;
(4) An itemized statement of all income received and disbursed during such period, unless waived;
(5) The balance of such principal and income remaining at the close of such period and how invested;
(6) The names and addresses of all living beneficiaries, including contingent beneficiaries, of the trust, and a statement as to any such beneficiary known to be under legal disability;
(7) A description of any possible unborn or unascertained beneficiary and his or her interest in the trust fund.
After the time for termination of the trust has arrived, the trustee or trustees may also file a final account in similar manner.
[ 2010 c 8 s 2092; 1985 c 30 s 97. Prior: 1984 c 149 s 130; 1955 c 33 s 30.30.030; prior: 1951 c 226 s 3. Formerly RCW 30.30.030.]
Notes:
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Intermediate and final accounts—Contents—Filing.


title: RCW 11.106.040

text:
At any time after the later of one year from the inception of the trust or one year after the day on which a report was last filed, any settlor or beneficiary of a trust may file a petition under RCW 11.96A.080 with the superior court in the county where the trustee or one of the trustees resides asking the court to direct the trustee or trustees to file in the court an account. At the hearing on such petition the court may order the trustee to file an account for good cause shown.
[ 1999 c 42 s 627; 1985 c 30 s 98. Prior: 1984 c 149 s 131; 1955 c 33 s 30.30.040; prior: 1951 c 226 s 4. Formerly RCW 30.30.040.]
Notes:
Effective date—1999 c 42: See RCW 11.96A.902.
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Petition for statement of account.


title: RCW 11.106.050

text:
When any account has been filed pursuant to RCW 11.106.030 or 11.106.040, the clerk of the court where filed shall fix a return day therefor as provided in RCW 11.96A.100(4) and issue a notice. The notice shall state the time and place for the return date, the name or names of the trustee or trustees who have filed the account, that the account has been filed, that the court is asked to settle the account, and that any objections or exceptions to the account must be filed with the clerk of the court on or before the return date. The notice shall be given as provided for notices under RCW 11.96A.110.
[ 1999 c 42 s 628; 1985 c 30 s 99. Prior: 1984 c 149 s 132; 1955 c 33 s 30.30.050; prior: 1951 c 226 s 5. Formerly RCW 30.30.050.]
Notes:
Effective date—1999 c 42: See RCW 11.96A.902.
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Account filed—Return day—Notice.


title: RCW 11.106.060

text:
Upon or before the return date any beneficiary of the trust may file the beneficiary's written objections or exceptions to the account filed or to any action of the trustee or trustees set forth in the account. The court shall appoint guardians ad litem as provided in RCW 11.96A.160 and the court may allow representatives to be appointed under RCW 11.96A.120 or 11.96A.250 to represent the persons listed in those sections.
[ 1999 c 42 s 629; 1985 c 30 s 100. Prior: 1984 c 149 s 133; 1977 ex.s. c 80 s 31; 1955 c 33 s 30.30.060; prior: 1951 c 226 s 6. Formerly RCW 30.30.060.]
Notes:
Effective date—1999 c 42: See RCW 11.96A.902.
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.
Purpose—Intent—Severability—1977 ex.s. c 80: See notes following RCW 4.16.190.

catchline: Account filed—Objections—Appointment of guardians ad litem—Representatives.


title: RCW 11.106.070

text:
Upon the return date or at some later date fixed by the court if so requested by one or more of the parties, the court without the intervention of a jury and after hearing all the evidence submitted shall determine the correctness of the account and the validity and propriety of all actions of the trustee or trustees set forth in the account including the purchase, retention, and disposition of any of the property and funds of the trust, and shall render its decree either approving or disapproving the account or any part of it, and surcharging the trustee or trustees for all losses, if any, caused by negligent or wilful breaches of trust.
[ 1985 c 30 s 101. Prior: 1984 c 149 s 134; 1955 c 33 s 30.30.070; prior: 1951 c 226 s 7. Formerly RCW 30.30.070.]
Notes:
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Court to determine accuracy, validity—Decree.


title: RCW 11.106.080

text:
The decree rendered under RCW 11.106.070 shall be deemed final, conclusive, and binding upon all the parties interested including all incompetent, unborn, and unascertained beneficiaries of the trust subject only to the right of appeal under RCW 11.106.090.
[ 1985 c 30 s 102. Prior: 1984 c 149 s 135; 1955 c 33 s 30.30.080; prior: 1951 c 226 s 8. Formerly RCW 30.30.080.]
Notes:
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Effect of decree.


title: RCW 11.106.090

text:
The decree rendered under RCW 11.106.070 shall be a final order from which any party in interest may appeal as in civil actions to the supreme court or the court of appeals of the state of Washington.
[ 1985 c 30 s 103. Prior: 1984 c 149 s 136; 1971 c 81 s 80; 1955 c 33 s 30.30.090; prior: 1951 c 226 s 9. Formerly RCW 30.30.090.]
Notes:
Rules of court: Method of appellate review superseded by RAP 2.2(a)(3), 18.22.
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Appeal from decree.


title: RCW 11.106.100

text:
Any adult beneficiary entitled to an accounting under either RCW 11.106.020 or 11.106.030 may waive such an accounting by a separate instrument delivered to the trustee.
[ 1985 c 30 s 104. Prior: 1984 c 149 s 137; 1955 c 33 s 30.30.100; prior: 1951 c 226 s 11. Formerly RCW 30.30.100.]
Notes:
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Waiver of accounting by beneficiary.


title: RCW 11.106.110

text:
This chapter is declared to be of similar import to the uniform trustees' accounting act. Any modification under chapter 11.97 RCW, including waiver, of the requirements of this chapter in any will, deed, or agreement heretofore or hereafter executed shall be given effect whether the waiver refers to the uniform trustees' accounting act by name or other reference or to any other act of like or similar import.
[ 1985 c 30 s 105. Prior: 1984 c 149 s 138; 1955 c 33 s 30.30.110; prior: 1951 c 226 s 12. Formerly RCW 30.30.110.]
Notes:
Short title—Application—Purpose—Severability—1985 c 30: See RCW 11.02.900 through 11.02.903.
Severability—Effective dates—1984 c 149: See notes following RCW 11.02.005.

catchline: Modification under chapter 11.97 RCW—How constituted.


title: RCW 11.107.010

text:
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
(1) "Ascertainable standard" means a standard relating to an individual's health, education, support, or maintenance within the meaning of Title 26 U.S.C. Sec. 2041(b)(1)(A) or 2514(c)(1) of the federal internal revenue code and any applicable regulations, as amended, as of July 23, 2017.
(2) "Charitable interest" means an interest in a trust that:
(a) Is held by a charitable organization;
(b) Benefits charitable organizations;
(c) Is held for charitable purposes; or
(d) Holds assets subject to limitations permitting their use only for charitable, religious, eleemosynary, benevolent, educational, or similar purposes.
(3) "Charitable purpose" means a purpose that is for: The relief of poverty, the advancement of education or religion, the promotion of health, governmental or municipal purposes, or other purposes the achievement of which are beneficial to a community.
(4) "Decanting power" or "the decanting power" means the power of a trustee under this chapter to distribute income and principal of a first trust to one or more second trusts or to modify the terms of the first trust.
(5) "Expanded discretion" means a discretionary power of distribution that is not limited to an ascertainable standard or a reasonably definite standard.
(6) "First trust" means a trust over which a trustee may exercise the decanting power.
(7) "Limited discretion" means a discretionary power of distribution that is limited to an ascertainable standard or a reasonably definite standard.
(8) "Person" means an individual, estate, business or nonprofit entity, public corporation, government or governmental subdivision, agency, or instrumentality, or other legal entity.
(9) "Qualified beneficiary" means a beneficiary that on the date of qualification is described in RCW 11.98.002(2).
(10) "Reasonably definite standard" means a clearly measurable standard under which a holder of a power of distribution is legally accountable within the meaning of Title 26 U.S.C. Sec. 674(b)(5)(A) of the federal internal revenue code and any applicable regulations, as amended, as of July 23, 2017.
(11) "Second trust" means:
(a) A first trust after modification under this chapter; or
(b) A trust to which a distribution of income and principal from a first trust is or may be made under this chapter.
[ 2017 c 29 s 1.]

catchline: Definitions.


title: RCW 11.107.020

text:
(1) Subject to (a) of this subsection and RCW 11.107.070, a trustee that has expanded discretion to distribute the principal of a first trust to one or more current beneficiaries may exercise the decanting power over the principal of the first trust, subject to the following:
(a) Except as provided in RCW 11.107.060, a second trust may not in an exercise of the decanting power under this section:
(i) Include as a current beneficiary a person that is not a current beneficiary of the first trust, except as otherwise provided in (b) of this subsection;
(ii) Include as a presumptive remainder beneficiary or successor beneficiary a person that is not a current beneficiary, presumptive remainder beneficiary, or successor beneficiary of the first trust, except as otherwise provided in (b) of this subsection; or
(iii) Reduce or eliminate a vested interest;
(b) Subject to (a)(iii) of this subsection and RCW 11.107.070, a second trust may in an exercise of the decanting power under this section:
(i) Retain a power of appointment granted in the first trust;
(ii) Omit a power of appointment granted in the first trust, other than a presently exercisable general power of appointment;
(iii) Create or modify a power of appointment if the powerholder is a current beneficiary of the first trust and the trustee has expanded discretion to distribute principal to the current beneficiary; and
(iv) Create or modify a power of appointment if the powerholder is a presumptive remainder beneficiary or successor beneficiary of the first trust, but the exercise of the power may take effect only after the powerholder becomes, or would have become if then living, a current beneficiary;
(c) A power of appointment described in (b) of this subsection may be general or nongeneral. The class of permissible appointees in favor of which the power may be exercised may be broader than or different from the beneficiaries of the first trust;
(d) In an exercise of the decanting power under this section, a second trust may be a trust created or administered under the law of any jurisdiction; and
(e) If a trustee has expanded discretion to distribute part but not all of the principal of a first trust, the trustee may exercise the decanting power under this section only over that part of the principal.
(2) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Presumptive remainder beneficiary" means a qualified beneficiary other than a current beneficiary.
(b) "Successor beneficiary" means a beneficiary that on the date of the beneficiary's qualification is determined not to be a qualified beneficiary. The term does not include a person that is a beneficiary only because the person holds a nongeneral power of appointment.
(c) "Vested interest" means:
(i) A right to a mandatory distribution that is noncontingent as of the date of the exercise of the decanting power;
(ii) A current and noncontingent right, annually or more frequently, to either a mandatory distribution of income or to withdraw income, a specified dollar amount, or a percentage of value of some or all of the trust income or principal;
(iii) A presently exercisable general power of appointment; or
(iv) A right to receive an ascertainable part of the trust principal on trust termination that is not subject to the exercise of discretion or the occurrence of a specified event that is not certain to occur.
[ 2017 c 29 s 2.]

catchline: Decanting power under expanded discretion.


title: RCW 11.107.030

text:
Subject to RCW 11.107.070, a trustee that has limited discretion to distribute the principal of a first trust to one or more current beneficiaries may exercise the decanting power over the principal of the first trust, subject to the following:
(1) Second trusts under this section, in the aggregate, must grant each beneficiary of the first trust beneficial interests in the second trusts which are substantially similar to the beneficial interests of the beneficiary in the first trust;
(2) A power to make a distribution under the second trust for the benefit of a beneficiary who is an individual is substantially similar to a power under the first trust to make a distribution directly to the beneficiary. A distribution is for the benefit of a beneficiary if:
(a) The distribution is made for the benefit of the beneficiary;
(b) The beneficiary is incapacitated or otherwise under a legal disability or the trustee reasonably believes the beneficiary is incapacitated or under a legal disability, and the distribution is made as permitted by the first trust instrument or otherwise as permitted by law; or
(c) The distribution is made as permitted under the terms of the first trust instrument and the second trust instrument for the benefit of the beneficiary;
(3) In an exercise of the decanting power under this section, a second trust may be a trust created or administered under the law of any jurisdiction; and
(4) If a trustee has limited discretion to distribute part but not all of the principal of a first trust, the trustee may exercise the decanting power under this section only over that part of the principal.
[ 2017 c 29 s 3.]

catchline: Decanting power under limited discretion.


title: RCW 11.107.040

text:
(1) The trustee of the first trust may exercise the decanting power under RCW 11.107.020 and 11.107.030 if:
(a) The trustee determines that the exercise of the decanting power is consistent with the trustee's fiduciary duties described in RCW 11.107.080(1);
(b) In the event that the first trust contains a charitable interest, the trustee gives written notice to the attorney general of the trustee's intention to exercise the decanting power; and
(c) The trustee gives written notice of the trustee's intention to exercise the decanting power to each qualified beneficiary, each holder of a presently exercisable power of appointment over any part of the first trust, and each person that currently has the right to remove or replace the trustee not less than sixty days prior to the effective date of the exercise.
(2) The trustee of the first trust, qualified beneficiaries, and any other party as defined by RCW 11.96A.030(5) may agree to exercise by the trustee of the decanting power by means of a binding agreement under RCW 11.96A.220.
(3) The trustee of the first trust, a qualified beneficiary, a holder of a presently exercisable power of appointment over any part of the first trust, and a person that currently has the right to remove or replace the trustee may petition the court under chapter 11.96A RCW regarding exercise of the decanting power for the following relief, to:
(a) Provide instructions to the trustee regarding whether a proposed exercise of the decanting power is permitted under this chapter and consistent with the fiduciary duties of the trustee;
(b) Approve an exercise of the decanting power;
(c) Determine that a proposed or attempted exercise of the decanting power is ineffective because the proposed or attempted exercise does not or did comply with this chapter or the proposed or attempted exercise would be or was an abuse of the trustee's discretion or a breach of fiduciary duty; or
(d) Order other relief to carry out the purposes of this chapter.
(4) The trustee of the first trust may petition the court under chapter 11.96A RCW regarding exercise of the decanting power for the following relief:
(a) An increase of the trustee's compensation under RCW 11.107.070(2)(a)(ii); or
(b) Modification under RCW 11.107.070(4)(b) of a provision granting a person the right to remove or replace the trustee.
(5) If there is at least one qualified beneficiary who is not a minor or who has a representative, the trustee is not required to give notice under subsection (1)(c) of this section to a qualified beneficiary who is a minor and has no representative. If all qualified beneficiaries are minors and none has a representative, the trustee must petition for appointment of a guardian ad litem under RCW 11.98A.160 [ 11.96A.160].
(6) The trustee is not required to give notice under this section to a person who is not known to the trustee or is known to the trustee but cannot be located by the trustee after reasonable diligence.
(7) A notice under subsection (1) of this section or petition under subsection (3) or (4) of this section must:
(a) Specify the manner in which the trustee must exercise the decanting power;
(b) Specify the proposed effective date for exercise of the decanting power;
(c) Include a copy of all governing instruments of the first trust; and
(d) Include a copy of all governing instruments of the second trust. An exercise of the decanting power under this section must be made in a record signed by the trustee; for this purpose, a "record signed by the trustee" must include a court order under subsection (3) of this section.
(8) The decanting power may be exercised before expiration of the notice period under subsection (1) of this section if all persons entitled to receive notice waive the period in writing. An exercise of the decanting power is not ineffective because of the failure to give notice to one or more persons under subsection (1) of this section if the trustee acted with reasonable care to comply with this section.
[ 2017 c 29 s 4.]

catchline: Decanting statute—Procedure to exercise decanting power.


title: RCW 11.107.050

text:
(1) A trustee or other person that reasonably relies on the validity of a distribution of part or all of the income and principal of a trust to another trust, or a modification of a trust, under this chapter or the law of another jurisdiction is not liable to any person for any action or failure to act as a result of the reliance.
(2) A debt, liability, or other obligation enforceable against income and principal of a first trust is enforceable to the same extent against that income and principal when held by the second trust after exercise of the decanting power.
(3) For purposes of the law of this state other than this chapter and subject to this subsection, a settlor of a first trust is deemed to be the settlor of the second trust with respect to the portion of the principal of the first trust subject to the exercise of the decanting power. In determining settlor intent with respect to a second trust, the intent of a settlor of the first trust and the intent of a settlor of the second trust, if different, may be considered. The intent of the trustee may also be considered.
(4) If the trustee intends to distribute all of the principal of a first trust to a second trust and the trustee makes a good faith effort to do so, the distribution of all of the principal of a first trust to a second trust includes subsequently discovered assets otherwise belonging to the first trust and principal paid to or acquired by the first trust after the distribution of the first trust's principal. If the trustee does not intend to distribute all of the principal of a first trust to a second trust, the distribution of part of the principal of a first trust to a second trust does not include subsequently discovered assets belonging to the first trust or principal paid to or acquired by the first trust after the distribution of principal from the first trust to the second trust, and those assets or that principal remain the assets or principal of the first trust.
(5) A reference under this title to a trust instrument or to terms of the trust includes the second trust, the second trust instrument, and the terms of the second trust.
(6) The title to all real estate and other property, both tangible and intangible, owned by the first trust remains vested in the second trust without reversion or impairment.
(7) An action or proceeding pending by or against the first trust may be continued by or against the second trust as if the decanting had not occurred.
(8) Except as otherwise provided by this chapter, all of the rights, privileges, immunities, powers, and purposes of the first trust remain vested in the second trust.
[ 2017 c 29 s 5.]

catchline: Decanting statute—Effects and consequences of an exercise of the decanting power.


title: RCW 11.107.060

text:
(1) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
(a) "Beneficiary with a disability" means a beneficiary of the first trust who the trustee believes may qualify for governmental benefits based on disability, whether or not the beneficiary currently receives those benefits or is an individual who has been placed under a guardianship or conservatorship under chapter 11.130 RCW.
(b) "Governmental benefits" means financial aid or services from a state, federal, or other public agency.
(c) "Special needs trust" means a trust the trustee believes would not be considered a resource for purposes of determining whether the beneficiary with a disability is eligible for governmental benefits.
(2) A trustee may exercise the decanting power under RCW 11.107.020 and 11.107.030 over the property of the first trust as if the trustee had authority to distribute principal to a beneficiary with a disability subject to expanded discretion if:
(a) The second trust is a special needs trust that benefits the beneficiary with a disability; and
(b) The trustee determines that exercise of the decanting power will further the purposes of the first trust.
(3) In an exercise of the decanting power under this section, the following rules apply:
(a) The provisions of the second trust for a beneficiary with a disability may:
(i) Meet the medicaid law requirements for an account in a pooled trust for a beneficiary with a disability under 42 U.S.C. Sec. 1369p(d)(4)(C), as amended, including requiring a payback to the state of medicaid expenditures of funds not retained by the pooled trust; or
(ii) Meet the medicaid law requirements for a trust for the sole benefit of a beneficiary with a disability under age sixty-five under 42 U.S.C. Sec. 1369(d)(4)(A), as amended, including requiring a payback to the state of medicaid expenditures.
(b) RCW 11.107.020(1)(a)(iii) does not apply to the interests of the beneficiary with a disability.
(c) Except as affected by any change to the interests of the beneficiary with a disability, the second trusts, in the aggregate, must grant each other beneficiary of the first trust beneficial interests in the second trusts which are substantially similar to the beneficiary's beneficial interests in the first trust unless inconsistent with (a)(i) or (ii) of this subsection (3).
[ 2020 c 312 s 720; 2017 c 29 s 6.]
Notes:
Effective dates—2020 c 312: See note following RCW 11.130.915.

catchline: Decanting statute—Trust for beneficiary with a disability.