Estate Distribution Agreement

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					                        Brief Summary of Washington H.B. 1114 (“Trust Mill Bill”)
                                          N. Elizabeth McCaw
                                         Stokes Lawrence, P.S.

        Chapter 67, Laws of 2007 (H.B. 1114) makes it a violation of the Washington Consumer
Protection Act for any person to “market estate distribution documents, directly or indirectly, in
or from this state unless the person is authorized to practice law in this state.” Section 3. This
law does not apply to banks, trust companies, savings banks, savings and loans, mutual savings
banks or credit unions. It does apply to all other types of entities, including charitable
organizations.

         What Activity Is Prohibited?

       It is unlawful to “market” estate distribution documents unless the person marketing is
authorized to practice law in this state. “Market” or “marketing” includes:

                   Every offer, contract or agreement to prepare an estate distribution document.
                   Every offer, contract or agreement to gather information to provide individualized
                    advice about an estate distribution document.
                   Every offer, contract or agreement to gather information for the preparation of an
                    estate distribution document.
                   Every offer, contract or agreement to provide individualized advice about an
                    estate distribution document.

               What Are Estate Distribution Documents?

               For purposes of the Act, an “estate distribution document” includes:

                        A Last Will and Testament;
                        A codicil;
                        Any writing, however, designated, that is intended to have the same legal
                         effect as a Last Will and Testament;1
                        Revocable and irrevocable inter vivos trusts and any instrument which
                         purports to transfer any of the trustor’s current and/or future interest in real or
                         personal property thereto;
                        Any agreement that fixes the terms and provisions of the sale of a decedent’s
                         interest in any real or personal property at or following the date of the
                         decedent’s death.

        It is very important to note that the definition of “estate distribution documents” covers
not only the documents themselves but also all documents, instruments or writings prepared as
marketing materials. Therefore, a sample trust agreement that is generally used to market
charitable remainder trusts to donors would be an “estate distribution document” for purposes of
the Act.

         1
             Expressly excluded from this definition are written materials relating to payable on death accounts.



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        The Act states that its intended purpose is to shut down the activities of “living trust
mills” and persons marketing estate planning services and documents, primarily to senior
citizens, as a means of obtaining information about an individual’s assets to then generate sales
of financial products in a deceptive manner. However, the actual scope of the Act is in fact
much broader than this stated purpose. Violations of the Act are “per se” violations of the
Washington Consumer Protection Act, and both the Washington Attorney General and private
citizens can file suit against a person or entity for violation of the Act.

         The Act becomes law on July 22, 2007.




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