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CT. Moser Moser Law TEDRA: Chapter 11.96A RCW Trust and Estate Dispute Resolution Act Law & Practice.

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Presentation on theme: "CT. Moser Moser Law TEDRA: Chapter 11.96A RCW Trust and Estate Dispute Resolution Act Law & Practice."— Presentation transcript:

1 CT. Moser Moser Law TEDRA: Chapter 11.96A RCW Trust and Estate Dispute Resolution Act Law & Practice

2 CT. Moser Moser Law Advocates Law Group TEDRA Law & Practice Tom Moser December 6, 2012

3 Moser Law Introduction Recent legislation Recent legislation 5 key elements of TEDRA 5 key elements of TEDRA The architecture of TEDRA The architecture of TEDRA How to commence a TEDRA action How to commence a TEDRA action Petition & Summons Petition & Summons Answer & Counterclaims Answer & Counterclaims Alternative Dispute Resolution Mediation Arbitration Initial Hearing Statute of limitations Special representative Cy Près Practice tips More...

4 Moser Law Legislative Amendments TEDRA was amended by SHB 1051 in the 2011 legislature with revisions that became effective January 2012: TEDRA was amended by SHB 1051 in the 2011 legislature with revisions that became effective January 2012: Trust situs Trust situs Venue for proceedings Venue for proceedings Notice by electronic transmission Notice by electronic transmission Statute of limitations Statute of limitations Correction of mistakes in documents Correction of mistakes in documents Cy près doctrine Cy près doctrine

5 Moser Law Architecture of TEDRA

6 Moser Law Architecture of TEDRA Power RCW 11.96A.020 Matter RCW 11.96A.030(2) Party RCW 11.96A.030(5) Jurisdiction RCW 11.96A.040 Purpose RCW 11.96A.010

7 Moser Law Look first to Purpose of the Act Purpose RCW 11.96A.010

8 Moser Law The Statute Purpose The overall purpose of this chapter is... for the resolution of disputes and other matters involving trusts and estates... The provisions are intended to provide nonjudicial methods for the resolution of matters, such as mediation, arbitration, and agreement. This chapter also provides for judicial resolution of disputes if other methods are unsuccessful. RCW 11.96A.010

9 Moser Law It is intended that the adoption of [the Act] will encourage and direct all parties in trust, estate, and nonprobate matter disputes, and the court system, to provide for expeditious, complete, and final decisions to be made in disputed trust, estate, and nonprobate matters. RCW 11.96A.260 The Statute Purpose Matter is defined in RCW 11.96A.030

10 Moser Law TEDRA gives Power to courts Power RCW 11.96A.020

11 Moser Law Plenary Power of Courts (1) It is the intent of the legislature that the courts shall have full and ample power and authority under this title to administer and settle: (a)... estates... incapacitated, missing, and deceased persons, including matters involving nonprobate assets and powers of attorney...; and (b) All trusts and trust matters. RCW RCW 11.96A.020

12 Moser Law Plenary Power of Courts (2) If this title should... be inapplicable... to... the matters listed in subsection (1)... the court nevertheless has full power and authority to proceed... all to the end that the matters be expeditiously administered and settled by the court. RCW RCW 11.96A.020

13 Moser Law Plenary Power of Courts “The Act's grant of plenary powers to the trial court lends additional support to the trial court's authority to appoint [the] trustee. The legislature provided that it intended courts to have ‘full and ample power and authority’ to administer and settle all trusts and trust matters under the Act.” “The Act's grant of plenary powers to the trial court lends additional support to the trial court's authority to appoint [the] trustee. The legislature provided that it intended courts to have ‘full and ample power and authority’ to administer and settle all trusts and trust matters under the Act.” In re Irrevocable Trust of McKean, 144 Wash. App. 333, 343, 183 P.3d 317, 322 (2008)

14 Moser Law Power of Courts When considering power of the court to act in a TEDRA consider the court rules. When considering power of the court to act in a TEDRA consider the court rules. PracticeTipPracticeTip

15 Moser Law Court Rules & TEDRA CR 1 states that generally the civil rules “govern the procedure in the superior court... with the exceptions stated in rule 81.” CR 1 states that generally the civil rules “govern the procedure in the superior court... with the exceptions stated in rule 81.” CR 81 states that rules are not applicable “where inconsistent with rules or statutes applicable to special proceedings.” CR 81 states that rules are not applicable “where inconsistent with rules or statutes applicable to special proceedings.”

16 Moser Law Special Proceeding A judicial proceeding under TEDRA is a special proceeding under the civil rules. RCW 11.96A.090(1). A judicial proceeding under TEDRA is a special proceeding under the civil rules. RCW 11.96A.090(1). Therefore, Superior Court Civil Rules and other procedural rules of court apply to judicial proceedings under TEDRA only to the extent that they are consistent with chapter 11.96A RCW, Therefore, Superior Court Civil Rules and other procedural rules of court apply to judicial proceedings under TEDRA only to the extent that they are consistent with chapter 11.96A RCW,

17 Moser Law Jurisdiction & Venue Jurisdiction RCW 11.96A.040

18 Moser Law Jurisdiction (1) The superior court... has original subject matter jurisdiction over the probate of wills and the administration of estates... in all instances, including without limitation: (a) When a resident of the state dies; (b) When a nonresident of the state dies in the state; or (c) When a nonresident of the state dies outside the state. RCW 11.96A.040

19 Moser Law Jurisdiction & Venue (4) The subject matter jurisdiction of the superior court applies without regard to venue. A proceeding or action by or before a superior court is not defective or invalid because of the selected venue if the court has jurisdiction of the subject matter of the action. RCW 11.96A.040(4)

20 Moser Law Venue for a probate may be in any county. In case of a challenge, priority is given first to the county of the Decedent's residence, then to any county in which part of the probate assets or the nonprobate assets might be located, and finally to the county in which the Decedent died. 26B Wash. Prac., Probate Law and Practice § 3.12 (citing RCW 11.96A.050 &.060) Venue Priority

21 Moser Law In Personam or In Rem Jurisdiction Probate proceedings are in rem: “ ‘It has been uniformly ruled... that proceedings to probate or to set aside the probate of wills are proceedings in rem and not in personam that such proceedings are exclusively to determine the status of the res and not the rights of the parties.’ Probate proceedings are in rem: “ ‘It has been uniformly ruled... that proceedings to probate or to set aside the probate of wills are proceedings in rem and not in personam; that such proceedings are exclusively to determine the status of the res, and not the rights of the parties.’ In re Estate of Black, 116 Wash. App. 492, 499, 66 P.3d 678, 682 (2003)

22 Moser Law In Personam or In Rem Jurisdiction The service of the petition and summons gives the court in personam jurisdiction over the parties. The service of the petition and summons gives the court in personam jurisdiction over the parties. The service provides notice which implicates the due process rights of a party. The service provides notice which implicates the due process rights of a party. Be aware of likely distinction between RCW 11.96A.100 and.110. Be aware of likely distinction between RCW 11.96A.100 and.110. Notice by mail and electronic transmission. Notice by mail and electronic transmission. PracticeTipPracticeTip

23 Moser Law In Personam or In Rem Jurisdiction RCW 11.96A.110 was amended to allow notice by electronic transmission. The issue is whether notice in §.110 is the same as in §.100: RCW 11.96A.110 was amended to allow notice by electronic transmission. The issue is whether notice in §.110 is the same as in §.100: Notice of judicial proceedings in §.110 may be by mail or electronic transmission; Notice of judicial proceedings in §.110 may be by mail or electronic transmission; Notice by summons in §.100 seems to require personal service. Notice by summons in §.100 seems to require personal service.

24 Moser Law Definition of Matters Matter RCW 11.96A.030(2)

25 Moser Law Matters: RCW 11.96A.030(2) "Matter" includes any issue, question, or dispute involving: "Matter" includes any issue, question, or dispute involving: (a) The determination of... (b) The direction of... (c) The determination of... (d) The grant to... (e) An action or proceeding... (f) The amendment, reformation, or conformation of... The list of “matters” is extensive

26 Moser Law Other “Matters” Within TEDRA a. Personal Representative Unfit to Serve (RCW ) a. Personal Representative Unfit to Serve (RCW ) b. Revocation of Letters (RCW and RCW ) b. Revocation of Letters (RCW and RCW ) c. Common Law Breach of Fiduciary Claims c. Common Law Breach of Fiduciary Claims d. Will Contests (RCW ) d. Will Contests (RCW ) e. Breach of an Oral Contract to Devise e. Breach of an Oral Contract to Devise f. Omitted Spouse (RCW ) f. Omitted Spouse (RCW ) g. Omitted Child (RCW ) g. Omitted Child (RCW ) 26B Wash. Prac., Probate Law and Practice § 2.33 More

27 Moser Law Other “Matters” Within TEDRA h. Creditor Claims (RCW ) h. Creditor Claims (RCW ) i. Breach of the Instrument i. Breach of the Instrument j. Negligence j. Negligence k. Conversion k. Conversion l. Unjust Enrichment l. Unjust Enrichment m. Inventory and Appraisement (RCW ) m. Inventory and Appraisement (RCW ) n. Tortious Interference with the Right to Inheritance n. Tortious Interference with the Right to Inheritance 26B Wash. Prac., Probate Law and Practice § 2.33

28 Moser Law Definition of Party in TEDRA Party RCW 11.96A.030(5)

29 Moser Law Party: RCW 11.96A.030(5) "Party" or "parties" means each of the following persons who has an interest in the subject of the particular proceeding and whose name and address are known to, or are reasonably ascertainable by, the petitioner: (a) The trustor if living; (b) The trustee; (c) The personal representative; (d) An heir;

30 Moser Law Party: RCW 11.96A.030(5) (e) A beneficiary, including devisees, legatees, and trust beneficiaries; (f) The surviving spouse or surviving domestic partner of a decedent with respect to his or her interest in the decedent's property; (g) A guardian ad litem; (h) A creditor; (i) Any other person who has an interest in the subject of the particular proceeding; (j) The attorney general if required...

31 Moser Law Party: RCW 11.96A.030(5) (k) Any duly appointed and acting legal representative of a party... ; (l) Where applicable, the virtual representative of any person described in this subsection... ; (m) Any notice agent, resident agent, or a qualified person,... ; and (n) The owner or the personal representative of the estate of the deceased owner of the nonprobate asset that is the subject of the particular proceeding,....

32 Moser Law Commencing a TEDRA Action Where do I start? Where do I start? How is an action commenced? How is an action commenced? If there is already a probate pending, do I file a new case or in the probate? If there is already a probate pending, do I file a new case or in the probate?

33 Moser Law Petition & Summons Unless rules of court require or this title provides otherwise, or unless a court orders otherwise: (1) A judicial proceeding under RCW 11.96A.090 is to be commenced by filing a petition with the court; RCW 11.96A.100 We need to come back to this statute And to this word!

34 Moser Law Petition & Summons (2) A summons must be served in accordance with this chapter and, where not inconsistent with these rules, the procedural rules of court, however,... RCW 11.96A.100 We will read the rest of this section carefully

35 Moser Law Petition & Summons (2)... if the proceeding is commenced as an action incidental to an existing judicial proceeding relating to the same trust or estate or nonprobate asset, notice must be provided by summons only with respect to those parties who were not already parties to the existing judicial proceedings; RCW 11.96A.100 Now go back to RCW 11.96A.090 Now go back to RCW 11.96A.090

36 Moser Law Where Do I Start? (2) A judicial proceeding under this title may be commenced as a new action or as an action incidental to an existing judicial proceeding relating to the same trust or estate or nonprobate asset. RCW 11.96A.090 A TEDRA action may be filed in an existing probate or trust litigation.

37 Moser Law Where Do I Start? (3) Once commenced, the action may be consolidated with an existing proceeding or converted to a separate action upon the motion of a party for good cause shown, or by the court on its own motion. RCW 11.96A.090 Let the judge figure out whether to consolidate or separate the action.

38 Moser Law The Petition Filing within the probate: Filing within the probate: Petitioner is an heir and the PR is respondent.

39 Moser Law The Petition Filing as an original action: Filing as an original action: The Estate is petitioner & respondent was an heirs who was holding assets of the Estate.

40 Moser Law The Petition Filing as trust litigation: Filing as trust litigation: The Trust & a co-trustee are petitioners & the other co- trustees are respondents

41 Moser Law Invoking Jurisdiction A petition may be filed to commence an action, but is not required to invoke the court’s jurisdiction. See In re Estate of Dubois, unpublished decision, Division III. A petition may be filed to commence an action, but is not required to invoke the court’s jurisdiction. See In re Estate of Dubois, unpublished decision, Division III. Widow with nonintervention powers filed and served a declaration of completion of probate; Widow with nonintervention powers filed and served a declaration of completion of probate; Sons of deceased filed notice of mediation within 30 days, but no petition; Sons of deceased filed notice of mediation within 30 days, but no petition; PR ignored the notice, closed the estate and made distribution to the sons. PR ignored the notice, closed the estate and made distribution to the sons.

42 Moser Law Invoking Jurisdiction Sons moved to reopen the probate; Sons moved to reopen the probate; PR responded that sons failed to follow RCW (2) requiring a petition to be filed to challenge automatic closure; PR responded that sons failed to follow RCW (2) requiring a petition to be filed to challenge automatic closure; Trial court agreed and denied the motion; Trial court agreed and denied the motion; Sons appeal and Court of Appeals reversed, holding that notice of mediation was sufficient under TEDRA; Sons appeal and Court of Appeals reversed, holding that notice of mediation was sufficient under TEDRA; Reversed

43 Moser Law Invoking Jurisdiction “A ‘judicial proceeding’ under TEDRA ‘may be commenced as a new action or as an action incidental to an existing judicial proceeding relating to the same trust or estate or nonprobate asset.’ RCW 11.96A.090(2). The sons here commenced their mediation action incidental to the probate. No petition was needed.” “A ‘judicial proceeding’ under TEDRA ‘may be commenced as a new action or as an action incidental to an existing judicial proceeding relating to the same trust or estate or nonprobate asset.’ RCW 11.96A.090(2). The sons here commenced their mediation action incidental to the probate. No petition was needed.” In re Estate of Dubois, 146 Wash. App (2008) Notice: This is an unreported case

44 Moser Law Summons (3) The summons need only contain the following language or substantially similar language: (3) The summons need only contain the following language or substantially similar language: RCW 11.96A.100(3) The text of the statute is not the same text as a normal summons.

45 Moser Law Summons RCW 11.96A.100(3) PracticeTipPracticeTip Don’t let your otherwise competent legal assistant draft the summons from your CR 4 Summons form!

46 Moser Law Answer to Petition & Counterclaims Answer and any counterclaim must be filed at least 5 days before the initial hearing; Answer and any counterclaim must be filed at least 5 days before the initial hearing; Replies to counterclaim must be filed at least 2 days before the hearing; Replies to counterclaim must be filed at least 2 days before the hearing; Since notice of an initial hearing requires only 20 days, things may move quickly! Since notice of an initial hearing requires only 20 days, things may move quickly!

47 Moser Law Answer to Petition & Counterclaims Answer must include all defenses, including challenge to subject matter jurisdiction. Answer must include all defenses, including challenge to subject matter jurisdiction. In re Estate of Palmer involved a TEDRA petition filed to challenge actions taken by respondent when she was attorney-in-fact for the decedent. In re Estate of Palmer involved a TEDRA petition filed to challenge actions taken by respondent when she was attorney-in-fact for the decedent. Respondent’s Answer did not raise defenses that she later raised on last day of trial. Respondent’s Answer did not raise defenses that she later raised on last day of trial.

48 Moser Law Answer to Petition & Counterclaims Trial court denied motions to dismiss that were untimely and Court of Appeals affirmed: “We hold that [respondent] waived the time bar defense in RCW (3) by failing to plead it in her answer or in a CR 12 motion.” Trial court denied motions to dismiss that were untimely and Court of Appeals affirmed: “We hold that [respondent] waived the time bar defense in RCW (3) by failing to plead it in her answer or in a CR 12 motion.” In re Estate of Palmer, 145 Wash. App. 249, , 187 P.3d 758, 763 (2008)

49 Moser Law Mediation A party may serve a “Notice of Mediation” and give notice of a hearing to set mediation. RCW 11.96A.300 A party may serve a “Notice of Mediation” and give notice of a hearing to set mediation. RCW 11.96A.300 The Notice may include a list of proposed mediators. The Notice may include a list of proposed mediators. The Notice must state the nature of the matters to be mediated. The Notice must state the nature of the matters to be mediated. Parties must object to mediation within 20 days of the scheduled hearing. Parties must object to mediation within 20 days of the scheduled hearing.

50 Moser Law Mediation If the court orders mediation the order is not subject to appeal or revision. If the court orders mediation the order is not subject to appeal or revision. If the court denies the request for mediation, the court may: If the court denies the request for mediation, the court may: Decide the issues outlined in the Notice or Petition; or Decide the issues outlined in the Notice or Petition; or Set the matter for arbitration; or Set the matter for arbitration; or Directing other judicial proceedings. Directing other judicial proceedings.

51 Moser Law Mediation A qualified mediator must be: A qualified mediator must be: An attorney having at least five years of experience in estate and trust matters, or An attorney having at least five years of experience in estate and trust matters, or An individual with special skill or training in the administration of trusts and estates, or An individual with special skill or training in the administration of trusts and estates, or An individual with special skill or training as a mediator. An individual with special skill or training as a mediator. May not have an interest in the subject matter and may not be related to a party. May not have an interest in the subject matter and may not be related to a party.

52 Moser Law Mediation The mediation date may be set by the court; The mediation date may be set by the court; The mediation must be conducted for not less than 3 hours, unless resolve earlier; The mediation must be conducted for not less than 3 hours, unless resolve earlier; Any resolution must be evidenced by a nonjudicial dispute resolution agreement under RCW 11.96A.220. Any resolution must be evidenced by a nonjudicial dispute resolution agreement under RCW 11.96A.220.

53 Moser Law Mediation Cost of mediation shall be borne equally by the parties and set forth in the written agreement. Cost of mediation shall be borne equally by the parties and set forth in the written agreement. A binding agreement process is at RCW 11.96A.210 to.250: A binding agreement process is at RCW 11.96A.210 to.250: Must be signed by all parties; Must be signed by all parties; Is binding and conclusive on all parties; Is binding and conclusive on all parties; The agreement or memorandum of agreement may be filed with the court. The agreement or memorandum of agreement may be filed with the court.

54 Moser Law Mediation If the agreement is filed it is equivalent to a final court order binding on all persons interested in the estate or trust. If the agreement is filed it is equivalent to a final court order binding on all persons interested in the estate or trust. If a special representative is appointed, the process for court approval of a binding agreement is at RCW 11.96A.230 &.240. If a special representative is appointed, the process for court approval of a binding agreement is at RCW 11.96A.230 &.240. The special representative appointment process is at 11.96A.250. The special representative appointment process is at 11.96A.250.

55 Moser Law Arbitration A party may commence arbitration by serving written notice of arbitration on all other parties. A party may commence arbitration by serving written notice of arbitration on all other parties. The notice must be served no later than twenty days after the later of: The notice must be served no later than twenty days after the later of: The conclusion of the mediation procedure, if any, or The conclusion of the mediation procedure, if any, or Twenty days after entry of the order providing that mediation is not required. Twenty days after entry of the order providing that mediation is not required. If the parties agree that mediation was not applicable, any party may file and serve a “Notice of Arbitration.” If the parties agree that mediation was not applicable, any party may file and serve a “Notice of Arbitration.”

56 Moser Law Arbitration Arbitration is available only if: A party has first petitioned for mediation and such mediation has been concluded; The court has determined that mediation is not required and has not ordered that the matter be disposed of in some other manner; All of the parties have agreed not to use the mediation procedures; or RCW The court has ordered that the matter must be submitted to arbitration. RCW 11.96A.310

57 Moser Law Arbitration The “Notice of Arbitration” may include a list of proposed arbitrators. The “Notice of Arbitration” may include a list of proposed arbitrators. A party may file an objection within 20 days after service of the Notice of Arbitration by filing a “petition”. A party may file an objection within 20 days after service of the Notice of Arbitration by filing a “petition”. A hearing must be held on the “petition” within 20 days after filing. A hearing must be held on the “petition” within 20 days after filing.

58 Moser Law Arbitration The party objecting must give ten days notice of the hearing to all parties; The party objecting must give ten days notice of the hearing to all parties; An order sending the matter to arbitration shall not be subject to appeal or revision. An order sending the matter to arbitration shall not be subject to appeal or revision. If the court denies the request for arbitration, the court may: If the court denies the request for arbitration, the court may: Decide the issues outlined in the Notice or Petition; or Decide the issues outlined in the Notice or Petition; or Directing other judicial proceedings. Directing other judicial proceedings.

59 Moser Law Initial Hearing The Initial Hearing is unique to TEDRA proceedings. RCW 11.96A.100 The Initial Hearing is unique to TEDRA proceedings. RCW 11.96A.100 The answer to the petition must be served and filed at least five days before the date of the initial hearing, and replies to counterclaims and cross-claims must be served and filed at least two days before the date of the hearing; The answer to the petition must be served and filed at least five days before the date of the initial hearing, and replies to counterclaims and cross-claims must be served and filed at least two days before the date of the hearing;

60 Moser Law Initial Hearing Unless requested otherwise the initial hearing must be a hearing on the merits to resolve all issues of fact and law; Unless requested otherwise the initial hearing must be a hearing on the merits to resolve all issues of fact and law; The clerk of each of the court shall fix the time for the initial hearing, no court order shall be required to fix the time or content of the notice of a hearing; The clerk of each of the court shall fix the time for the initial hearing, no court order shall be required to fix the time or content of the notice of a hearing; RCW 11.96A.100 RCW 11.96A.100

61 Moser Law Initial Hearing If the initial hearing is not a hearing on the merits or does not result in a resolution of all issues the court may; If the initial hearing is not a hearing on the merits or does not result in a resolution of all issues the court may; (a) resolve such issues as it deems proper, (a) resolve such issues as it deems proper, (b) determine the scope of discovery, and (b) determine the scope of discovery, and (c) set a schedule for further proceedings for the prompt resolution of the matter (c) set a schedule for further proceedings for the prompt resolution of the matter

62 Moser Law Statute of Limitations Three year statute of limitations for TEDRA actions. RCW 11.96A.070 Read RCW 11.96A.100(1) carefully: (1) A judicial proceeding under RCW 11.96A.090 is to be commenced by filing a petition with the court; Read RCW 11.96A.100(1) carefully: (1) A judicial proceeding under RCW 11.96A.090 is to be commenced by filing a petition with the court; PracticeTipPracticeTip The key is “filing” of the petition tolls the statute of limitations, not just service.

63 Moser Law Special Representative The personal representative or trustee may petition the court... for the appointment of a special representative to represent a person who is interested in the estate or trust and: (i) Who is a minor; (ii) who is incompetent or disabled; (iii) who is yet unborn or unascertained; or (iv) whose identity or address is unknown. The petition may be heard by the court without notice. RCW 11.96A.250(1)(a)

64 Moser Law Cy Près Doctrine RCW 11.96A.127, new section that codified the Cy Près doctrine in common law. RCW 11.96A.127, new section that codified the Cy Près doctrine in common law. Applies to charitable disposition by will or trust where the original bequest becomes impossible or impractical. Applies to charitable disposition by will or trust where the original bequest becomes impossible or impractical.

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