Trust Proceedings (TRP)How do I create a trust, request appointment of an additional or successor Trustee, request a change in trust provisions, or terminate a trust?
General InformationIn its simplest form, a trust is created when property is held by one person or entity for the benefit of another or others. A variety of trust-related actions are filed in the Probate Division. The most common are petitions for appointment of a successor, substitute, or additional Trustee, petitions to establish a supplemental (or special) needs trust, and complaints to modify, reform, or terminate a trust. Trust proceedings are complicated. It is recommended that you seek advice of counsel if a trust proceeding needs to be opened.
- Petitions for appointment of a successor, substitute, or additional Trustee 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. Superior Court, Probate Division 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,
- Modifying, reforming, construing, or terminating a trust or asking for the removal of a Trustee requires the filing of a complaint in accordance with Superior Court, Probate Division 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 U.S.C. 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:
- (1) A provision that pays back the value of benefits received from Medicaid when the trust beneficiary dies,
(2) A bond for the Trustee,
(3) Supervision of the trust by the Court, including compliance with investment standards set forth in Superior Court, Probate Division Rule 5 and the filing of an inventory and annual accounts,
(4) The filing of a non-resident power of attorney (if the Trustee is not a D.C. resident),
(5) Service of annual accounts on the District of Columbia,
(6) Service of a notice of termination of the trust on the District of Columbia, and/or
(7) A provision in accordance with Superior Court, Probate Division 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 D.C. Code, secs. 19-1301.01 et seq. The District of Columbia Code may be found at here. Superior Court, Probate Division Rules 201 through 213 and Civil Rule 304 also apply. The Probate Division Rules may be found here.