Distributing to an Incapacitated Heir or Beneficiary (eg, a Minor)
The usual case is a minor, a person who has not attained 18 years of age, although an adult can also lack legal capacity, such as an adult under a substantial disability for whom a guardianship has been established.
The Problem: In order for you to satisfy your requirements for making distribution, the heir or beneficiary must have legal capacity, and a minor, for example, lacks such capacity.
Net result: Make sure that if any heir or beneficiary lacks legal capacity, you deal with that person through his/her proper fiduciary.
Distribution Issues: See RCW 11.76.095 (although note that the statute inexplicably fails to provide for intestate estates distributed under Nonintervention Powers). Appropriate distributees for the benefit of an incapacitated heir or beneficiary:
- Trustee. To a named Trustee of a trust for the benefit of that person, for example, if such a trust is named in the Decedent’s Will or the distribution to a trustee is otherwise acceptable to the Court. See RCW 11.108.
- UTMA Custodian. A Custodian under the Washington Transfers to Minors Act (RCW 11.76.095(3) and see RCW 11.114), if the transfer qualifies under that Act (See RCW 11.114.090.) Such transfers may be made under Nonintervention Powers (RCW 11.68.090(1)) without Court authorization for either of the following:
- A Personal Representative of a testate estate in which the Will authorizes such transfers. RCW 11.114.050
- A Personal Representative of either an intestate estate or a testate estate in which the Will fails to authorize such transfers so long as the transfer does not exceed $30,000 in value. RCW 11.114.060
- Blocked Account. A blocked account at an insured financial institution (RCW 11.76.095(1)), from which the minor may obtain the proceeds upon attaining age 18 years and proving his/her age to the financial institution.
- Guardian of Estate. A Guardian for the benefit of that person, which Guardian will need to be appointed by the Court if one has not already been appointed. RCW 11.76.095(2) and see RCW 11.88.
If the Decedent has planned for the possible distribution to a minor (eg, authorized distribution to a Trustee or Custodian), the King County Court will usually support that distribution. If no such planning is evidenced, the King County Court will usually prefer distribution to a blocked account over that to a Custodian. [Remarks by Commissioner Watness at Ex Parte Practice Tips CLE Program, KCBA, December 15, 2004.]