Monday, November 11, 2013

In re Riddell case brief

In re Riddell case brief summary
157 P.3d 888 (2007)

Petitioner trustee filed a petition seeking to consolidate two trusts and to modify the trust to create a “special needs” trust on behalf of his daughter. The Kitsap Superior Court (Washington) granted the motion to consolidate the trusts, denied the motion to modify, and denied the trustee's motion for reconsideration. The trustee appealed.


The trustee's parents established trusts for the benefit of the trustee, his wife, and the settlors' grandchildren. The trusts provided that the grandchildren would receive the benefits until the age of 35 when the trusts would terminate and the trustee would distribute the principal to the grandchildren. The trustee's daughter suffered from schizophrenia affective disorder and bipolar disorder; she was not expected to live independently for the remainder of her life. The trustee sought to create a “special needs” trust on his daughter's behalf, instead of distributing the trust principal to her. The appellate court determined that the trial court properly found that it possessed the power to modify the trust pursuant to the Trust and Dispute Resolution Act, Wash. Rev. Code ch. 11.96A.

  • However, remand was necessary because 
  • (1) there was no question that changed circumstances intervened to frustrate the settlors' intent, and 
  • (2) the trial court should not have considered any loss to the State in determining whether an equitable deviation was allowed since 42 U.S.C.S. § 1396p(d)(4)(A)invited, rather than discouraged, the creation of special needs trusts in such situations.

The appellate court remanded to the trial court to reconsider the matter and to order such equitable deviation as was consistent with the settlors' intent in light of changed circumstances.

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