Frederick A. Graham v. Bank Of America, N.a., 74201-9

Felecia Graham’s testamentary trust provided income to son Frederick for life and permitted principal distributions when the trustee deemed income insufficient for his accustomed standard of living; remainder goes to appointees or estate.
Donald Jr. relinquished his lifetime interest in 2012; the trust was divided into subtrusts and Bank of America became trustee of Frederick’s subtrust.
Frederick requested converting to a 4% unitrust and escalating distributions; the Bank performed a stochastic analysis and proposed an annual distribution of $661,974 to preserve principal through the expected life of Frederick’s father.
Negotiations under TEDRA failed; the Bank filed a petition seeking court guidance and argued a separate remainder interest existed that might require a guardian ad litem (GAL).
The trial court granted summary judgment for the Bank, approved the Bank’s distribution methodology, stated (unnecessarily) that a separate remainder interest existed, and reserved further rulings if future conflicts arose. Frederick appealed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a "separate remainder interest" exists in the trust	Graham: no separate remainder interest exists; court should rule as matter of law	Bank: a remainder interest exists (appointees/estate) and may create potential conflict	Court: decline to decide; statement was superfluous and unnecessary to disposition
Whether Bank abused its discretion in setting distribution plan	Graham: challenges Bank’s positions that implicate remainder; but concedes Bank didn’t abuse discretion in amount/method	Bank: used reasonable, prudent stochastic methods and acted within discretionary powers	Court: affirmed — Bank did not abuse its discretion
Whether Bank breached fiduciary duty by asserting existence of remainder interest in TEDRA petition	Graham: Bank advocated adverse position against him	Bank: petition sought instruction to protect trust and interpret trustee duties, not to favor one beneficiary in a particular fund	Court: Bank did not breach duty; seeking guidance to protect trust was appropriate
Whether Bank must reimburse trust (and/or pay Graham’s appellate fees) for attorney fees	Graham: Bank breached duties so must reimburse trust and pay appellate fees	Bank: trust may pay reasonable administration fees; trial court already ordered trust to pay trial fees; appeal provides no benefit to trust	Court: affirmed trial court — no reimbursement order against Bank; denied Graham’s request for appellate fees

Owen v. Burlington N. & Santa Fe R.R., 153 Wn.2d 780 (review standard for summary judgment)
Templeton v. Peoples Nat'l Bank of Wash., 106 Wn.2d 304 (trustee discretionary powers reviewed for abuse of discretion)
Esmieu v. Schrag, 88 Wn.2d 490 (trustee’s fiduciary duties described)
In re Estate of Bernard, 182 Wn. App. 692 (trustee may protect plan of trust without breaching duties)
Laubner v. JP Morgan Chase Bank, N.A., 386 Ill. App. 3d 457 (trustee’s conservative plan that incidentally benefits remaindermen not a breach)
Northern Trust Co. v. Heuer, 202 Ill. App. 3d 1066 (trustee breached duty by favoring one beneficiary at the expense of another)
Ferrall, 33 Cal. 2d 202 (rule on trustee litigating conflicting beneficiary claims)