In Matter of Estate of Rathbone, the Washington State Supreme Court held that the trial court did not have the authority to construe an ambiguous provision in a non-intervention Will (1). Rathbone involves a dispute among three brothers (Todd, Glen, and Douglas) over the estate of their mother, Kathryn Rathbone. Kathryn’s Will included a specific bequest of real property to Glen but gave Todd the option to purchase the property from the estate. The bequest did not state how the sale proceeds should be distributed if Todd exercised this option. After the specific bequests were made, Kathryn’s Will required all remaining property to be distributed equally among her three sons.
Todd was appointed as the Personal Representative with non-intervention powers. Todd distributed the estate assets without court involvement because courts are not involved in estate administrations when non-intervention powers are granted (2) and Kathryn’s Will stated the “Personal Representative … shall have the authority to construe this Will … and to resolve all matters pertaining to disputed issues or controverted claims.”
Todd exercised the option to purchase the real property and distributed the sale proceeds evenly among the three brothers with the residue of Kathryn’s estate. Glen disputed Todd’s interpretation of the Will, arguing that the sale proceeds should have been distributed only to him. Glen brought a petition requesting that the court construe the bequest discussed above in his favor. He claimed that Todd breached his fiduciary duties, committed self-dealing, and contradicted Kathryn’s intent by distributing the sale proceeds to all three brothers. The court held it had the authority to interpret the Will and found that Glen was entitled to the entire sale proceeds. The Court of Appeals affirmed this decision.
The Washington State Supreme Court disagreed. It held that the trial court did not have authority to construe Kathryn’s non-intervention Will for three reasons. First, the Court held RCW 11.68.110 only grants narrow powers to approve fees and order accountings. Second, the Court held that the trial court lacked authority under RCW 11.68.070 to construe the Will because that statute provides a cause of action for removal of a Personal Representative, not interpretation of a Will. Finally, the Court held that TEDRA alone does not give the trial court authority to construe the Will because court involvement would violate the Kathryn’s intent expressed in her Will.
Lessons from the Rathbone Decision
1. Specific Bequests Should be Carefully Drafted
The specific bequest of the real property is at the heart of the dispute in Rathbone, which provides: “I leave the Road K Property to Glen, subject however to an option in favor of Todd to purchase the same from my estate for the sum of $350,000 in cash, or for a portion of his share of the estate of equal value, paid at closing.” As discussed above, this bequest does not state how the sale proceeds should be divided if Todd exercises his option. Had this provision been more carefully drafted, the entire dispute may have been avoided. Estate planning attorneys should carefully draft specific bequests, particularly those involving real property, to take into account how property should be distributed in the event that an option to purchase is exercised.
2. If a Testator Intends to Avoid Court Intervention, a No-Contest Clause Should Give the Personal Representative Power to Construe the Will
The no-contest clause in Kathryn’s Will provides that any beneficiary who challenges the Will shall forfeit any interest in Kathryn’s estate and the Personal Representative “shall have the authority to construe [the] Will…and to resolve all matters pertaining to disputed issues.” The Court noted this provision in reaching its conclusion that the trial court did not have the authority to construe the Will. Rathbone illustrates that no-contest clauses should expressly provide that a Personal Representative has the power to construe a Will. By explicitly giving this power to the Personal Representative, a court is more likely to hold that the testator intended the Personal Representative to have such broad authority – as the Court held in Rathbone.
Ramifications of Rathbone
A recent unpublished Washington case cited Rathbone and held that the Personal Representative had exclusive authority to interpret a decedent’s Will (3). Like Rathbone, this case involved a specific bequest of real property. The court declined to interpret the bequest differently than the Personal Representative’s interpretation of it. This case, although unpublished, shows that if the Rathbone decision is applied broadly, Personal Representatives may be afforded substantial discretion in interpreting non-intervention Wills. However, when a dispute arises over the administration of an estate, all available avenues should be considered and weighed on a case-by-case basis.
For more information regarding estate administration, please contact Ryan Montgomery, Kara Kalenius Novak, or Kaity Perez.