Trusts

Petitions for appointment of a successor, substitute, or additional Trustee 

These petitions are filed when the terms of the trust instrument do not provide a mechanism for such an appointment and either a vacancy in the trusteeship has occurred (perhaps because of death of the Trustee or because a Trustee needs to resign) or an additional Trustee is desired.

Probate Rule 202(c) governs such petitions and states that notice shall be given to parties and all affected persons. These are defined to be the serving Trustee(s), the present income beneficiaries, and any then-living remaindermen who would receive trust assets if all income beneficiaries died on the date of the filing of the petition. When such petitions are filed, written consents are often attached to speed processing time. Because these petitions are for one purpose/transaction/event only, these cases close after a decision is made regarding the petition unless supervision is requested or ordered by the Court because of the circumstances,

Changes to a trust

Modifying, reforming, construing, or terminating a trust or asking for the removal of a Trustee requires the filing of a complaint in accordance with Probate Rule 208. Complaints are docketed in the new Major Litigation (LIT) case type, but an underlying trust proceeding will be opened if one does not already exist and the two proceedings will be linked in the case tracking system.

Petitions to establish supplemental (or special) needs trusts for an individual are filed to obtain Court approval of trusts that will preserve assets for persons under the age of 65 who are entitled to receive means-tested government benefits, such as Medicaid. The person who will be the trust beneficiary must be disabled as defined by federal law (42 USC. 1396p(d)(4)), and the trust must be irrevocable. When such petitions are filed, a copy of the proposed trust and an order establishing trust should be attached. These petitions are usually set for a hearing.

The Court reviews the trust for approval and considers whether any of the following provisions that are not included should be added:

• A provision that pays back the value of benefits received from Medicaid when the trust beneficiary dies
• A bond for the Trustee
• Supervision of the trust by the Court, including compliance with investment standards set forth in Probate Rules 5 and the filing of an inventory and annual accounts
• The filing of a non-resident power of attorney (if the Trustee is not a DC resident)
• Service of annual accounts on the District of Columbia
• Service of a notice of termination of the trust on the District of Columbia, and/or
• A provision in accordance with Probate Rule 308 governing compensation for the Trustee

If a petition to establish a special or supplemental needs trust is filed in an intervention proceeding and granted by the Court, a separate trust proceeding is opened by the Probate Division, and the two proceedings are linked in the case tracking system. Petitions can also be filed to transfer funds into a pooled special needs trust, which has different requirements from those of an individual trust.

Trust proceedings are governed by DC Code, secs. 19-1301.01 et seq. Probate Division Rules 201 through 213 and Civil Rule 304 also apply.

General Information 

A proceeding to notify interested persons and creditors that a deceased person had established a trust before death is begun by filing three documents with the Office of the Register of Wills: 

1. Notice of Existence of Revocable Trust
2. Certification of Trust
3. Financial Account Information for Trusts Only (Form 27-T)

The Probate Division arranges for publication of the notice in the two publications chosen by the filer, and the publications bill the Trustee(s) directly. The Trustee(s) must mail a copy of the notice within 15 days of the first date of publication to all qualified trust beneficiaries, heirs of the decedent, and creditors whose identities are known or could be reasonably ascertained. The Trustee(s) may, but is not required to, file the proofs of publication and the Verification and Certificate of Notice of Existence of Revocable Trust within 90 days of the first date of publication as evidence that the mailing has occurred. 

The Trust is subject to claims of the deceased settlor’s creditors, costs of administration of the settlor’s estate, the expenses of the deceased settlor’s funeral and disposal of remains, and statutory allowances to a surviving spouse and children to the extent the deceased settlor’s residuary probate estate is inadequate to satisfy those claims, costs, expenses, and allowances.

An action to contest the validity of the trust must be commenced by the earliest of:

1. One year from date of death of the deceased settlor,
2. Six months from the date of first publication of the Notice of Existence of Revocable Trust, or
3. Ninety days after the Trustee sends a person with a potential cause of action a copy of the trust instrument and a notice informing the person of the trust’s existence, the Trustee’s name and address, and the time allowed for commencing a proceeding. 

Claims 

Creditors and other interested persons have six months from the first date of publication of the notice to file any claims against the trust. To file a claim:

• complete the form titled Claim Against Revocable Trust
• send a copy to the Trustee(s)
• file the claim in the Probate Division
• pay the $5.00 filing fee in cash or by check payable to the Register of Wills

The Trustee may respond by using the Notice of Action Taken on Claim form. If the Trustee(s) takes no action on a claim, allows a claim but fails to pay it within a reasonable time, or disallows a claim, the claimant may file a petition for payment from the trust. These proceedings are governed by DC Code, sections 19-1301 et seq. and specifically 19-1305.05(d) and 19-1306.04(a)(3) and Probate Division Rules 202, 208, 212 and 213.