General Powers of a Personal Representative

A personal representative with nonintervention powers has always had broad powers to manage an estate without court supervision. This new legislation confirms this, but provides an updated outline of those powers. Those powers include the authority to sell property, borrow money, honor the decedent’s contracts, determine who is entitled to a portion of the estate, and make pro rata and nonpro rata distributions from the estate without court approval. The new law also confirms the obligations of a personal representative, including the duty to act in good faith, honestly, consistent with the terms of the will, and in the interests of the beneficiaries of the estate. S.B. 5132, § 4010.

Power of a Personal Representative to Interpret and Construe a Will

In Estate of Rathbone, 190 Wn.2d 332, 412 P.3d 1283 (2018), the Washington Supreme Court appeared to give personal representatives with nonintervention powers virtually unlimited power to interpret and construe a will. This new legislation places limits on this power and defines the procedures for challenging a personal representative’s interpretation or construction of a will. Under S.B. 5132, any party can file a petition under the Trust and Estate Dispute Resolution Act (TEDRA), Ch. 11.96A RCW, to ask the court to resolve disputes over an ambiguous provision in a will. However, the personal representative’s interpretation is presumed to be correct. This presumption can be rebutted with evidence that the personal representative’s interpretation or construction is not consistent with the testator’s intent. S.B. 5132, § 4007.

Power of a Personal Representative to Bring a Request for Instructions

In Rathbone, the Washington Supreme Court also observed that after a trial court granted nonintervention powers to a personal representative, the court’s authority over the estate’s administration was limited. When these powers are granted to the personal representative, a trial court would have no authority to rule on matters that weren’t otherwise authorized by a separate statute. Rathbone, 190 Wn.2d at 339. This new legislation makes clear that a court may rule on motions brought by the personal representative related to the estate, and the personal representative does not waive nonintervention powers by making such a request. S.B. 5132, § 4017. This legislation, however, only references the personal representative’s power to bring such motions. Therefore, it’s unclear whether any other party can bring such “requests for instructions” in a probate case, or whether they would instead need to file a petition under TEDRA to resolve questions related to the estate.

Creditor Claims by a Personal Representative

When a personal representative has a creditor claim against the estate, current law requires the filing of a petition under TEDRA. S.B. 5132 removes the language requiring the filing of a petition. Now, a personal representative’s creditor claim must be “addressed, resolved, and settled under the procedures provided under [TEDRA].” S.B. 5132, § 4001. This would allow the personal representative to reach a nonjudicial agreement with the other parties interested in the estate, thereby avoiding the time and expense related to filing a petition and obtaining judicial approval of the creditor claim.

Removing a Personal Representative

The process for removing a personal representative can be confusing. The new legislation removes the sometimes ignored process of first obtaining a show cause-like order requiring the personal representative to appear in court to answer why he or she should not be removed (also known as a “citation”). Under this new legislation, a petitioner must file a petition under TEDRA that is verified or supported by an affidavit showing facts that support the claim for removal. The new statute lays out the grounds that would support a removal, which includes many of the reasons you’d expect, such as breach of fiduciary duty, exceeding the personal representative’s authority, and violating a law affecting the estate, among others. The law also allows a court to fashion an equitable remedy, short of removal, including limiting the personal representative’s powers. S.B. 5132, § 4009.

This change brings with it something practitioners will need to juggle. Under the citation procedure, the removal request would be brought under the probate case number, so there was never an issue of where the order removing the personal representative would be filed. But TEDRA petitions must be filed under a new case number (see RCW 11.96A.090(2)), and this new legislation makes no exception for TEDRA petitions brought to remove a personal representative. Therefore, practitioners should ensure that any order that is entered removing or restricting a personal representative’s powers is filed under both the TEDRA case number and the probate case number. 

Closing the Probate

When closing an estate, most personal representatives use a Declaration of Completion, which is authorized by RCW 11.68.110. When this method is used, this new legislation changes how a party objects to the estate closure, what the party can object to, and the notice that the personal representative must give to heirs and beneficiaries. Under existing law, if an heir or beneficiary is unhappy about the proposed closing of the estate, they had few options: they can file a petition to remove the personal representative (see Rathbone, 190 Wn.2d at 342), a right that is not mentioned in the statutory Notice of Filing of the Declaration of Completion; or they can follow the rules for objecting that are provided in the Notice of Filing. RCW 11.68.110. But if they follow this latter process, their objection was limited to objecting to the fees paid to professionals and/or demanding an accounting. Rathbone, 190 Wn.2d at 340.

The new legislation eliminates this confusion by creating one process for objecting to the closing of the probate: Any heir or beneficiary can file a petition under TEDRA within 30 days of the filing of the Declaration of Completion. That petition can challenge the fees paid to professionals, demand that the personal representative close the estate under RCW 11.68.100 (i.e., with an accounting), and/or request other relief to defend the rights of the heir or beneficiary. The statutory language that must be included in the Notice of Filing has been changed to reference these rights and this new process for objecting. S.B. 5132, §§ 4014-15.

The probate code also allows a personal representative to close and distribute the estate with a Declaration of Completion while holding back up to $3,000 to settle any final tax liabilities. RCW 11.68.114; S.B. 5132, § 4016. This has not changed, nor has the obligation to file with the court and mail to the heirs and beneficiaries copies of the checks or receipts showing how the reserves were distributed. But now the personal representative must give more extensive notice of the right to petition the court for an accounting of how the reserves were used and/or a judicial review of how the reserves were distributed. See S.B. 5132, § 4016.

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