In Re The Matter Of Tony Vivolo Residuary Trust, Steven Vivolo

CourtCourt of Appeals of Washington
DecidedDecember 16, 2024
Docket85676-6
StatusUnpublished

This text of In Re The Matter Of Tony Vivolo Residuary Trust, Steven Vivolo (In Re The Matter Of Tony Vivolo Residuary Trust, Steven Vivolo) is published on Counsel Stack Legal Research, covering Court of Appeals of Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re The Matter Of Tony Vivolo Residuary Trust, Steven Vivolo, (Wash. Ct. App. 2024).

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

In the Matter of: No. 85676-6-I TONY VIVOLO RESIDUARY TRUST F/B/O NICOLAS VIVOLO and the DIVISION ONE ESTATE OF NICK VIVOLO UNPUBLISHED OPINION

COBURN, J. — At issue in this appeal is whether Nicholas Vivolo exercised his

power of appointment in his will as to his share of the Tony Vivolo Residuary Trust, that

was first created by his father. Based on our de novo review of Nicholas’ 1 will, we hold

that he did not exercise his power of appointment and affirm.

FACTS

Tony Vivolo and Iona Vivolo were married and had six children: Ronald, Steven,

Nicholas, Joseph, Vance, and Vincent. The family also included several grandchildren,

including Christopher, the son of Vincent, who predeceased Iona. In 1970 Tony and

Iona created the family Irrevocable Trust for the benefit of their children. In Tony’s 1994

will, he granted each of his children, except Steven, a power of appointment as to their

individual share of Tony’s Residuary Trust. Tony expressly disinherited Steven. Two

1 Because multiple family members share the same surname, for clarity and consistency we refer to all family members by their first names as listed in their parents’ wills. No. 85676-6-I/2

years later, Tony executed a second codicil to his will and no longer excluded Steven. In

this codicil, Tony granted Iona a special power of appointment to designate and appoint

by her last will the manner in which Tony’s Residuary Trust shall be divided and

distributed into shares for their surviving children and the lawful surviving descendants

of any deceased child of theirs. Though Tony expressed his wishes as to how the

shares were to be distributed, he expressly stated those wishes were “not binding” on

his wife.

By 2005, Iona was a widow and two of her sons had already passed. In addition

to the family trust, and Tony’s Residuary Trust, she also had created a GSTT Exempt

Trust, and a Non-GSTT Exempt Trust. 2 Iona executed her will, dated July 28, 2005,

and granted all of her children, whether living or deceased, a general power of

appointment as to the GSTT Non-Exempt Trust. That grant stated:

(c) General Power of Appointment: Each Child shall have the power to appoint in his Will to such appointee or appointees whomsoever, on such terms and in such amounts as he shall determine, all of the remainder of his or her Share of the Non-GSTT Exempt Trust (“the Appointive Property”). To the extent a Child fails to exercise such power, the Appointive Property shall be distributed as otherwise provided in subparagraphs (iii) and (iv) of paragraph 2(b) above. I intend this power of appointment to be a taxable “general power of appointment” as described in IRC Sec. 2041 exercisable in favor of the Child’s creditors, his estate, or the creditors of his estate.

Iona also exercised her power of appointment as to Tony’s Residuary Trust that Tony

had granted her. Her will stated:

EXERCISE OF LIMITED POWER OF APPOINTMENT I hereby elect to exercise the power of appointment to designate the shares of the Residuary Trust established under the Will of my husband, Tony Vivolo, that was vested in me pursuant to the Second

2 Within the context of trusts and asset transfers, GSTT stands for Generation-Skipping Transfer Tax. 2 No. 85676-6-I/3

Codicil to the Last Will and Testament of Tony Vivolo, dated March 28, 1996,[3] as follows: The Residuary Trust shall be divided into equal Shares, one Share for each of my Children who survives me and one Share for the issue of a Child who does not survive me, in the same manner as provided in Article II, paragraph 3(a), except that these Shares of the Residuary Trust shall not be adjusted to account for Lifetime Benefits as I have made what I consider to be the appropriate adjustments in paragraph 3(a) of Article II of this Will with respect to the Shares of my own estate. In all other respects, the Shares from my husband’s Residuary Trust described in this Article V shall be administered and distributed in the same manner as the Shares of the Non-GSTT Exempt Trust described in Article II, paragraph 3. Later, while Iona was still alive, all three trusts (the family Irrevocable Trust,

Tony’s Residuary Trust, and the Non-GSTT Exempt Trust) were merged in 2008 into a

Family Irrevocable Trust and converted into six separate trusts. After Iona died, litigation

ensued that led to a court-approved TEDRA Agreement that involved all living

beneficiaries and representatives of future children of all current beneficiaries. 4

Nicholas, Steven, and Christopher were represented by counsel. The Agreement

expressly stated its purpose, which included to “correct the effect of the 2008 merger,

which merged trusts with varying and conflicting provisions.” 5

3 Tony’s second codicil to his will is dated March 28, 1996. The second codicil refers to his first codicil dated November 22, 1995. His first codicil is related to Tony’s 1994 will. 4 The Order Approving the TEDRA Agreement was entered after considering objections to the “Amended ‘Reform TENDRA Agreement.’” The order approved the TEDRA Agreement attached as “Exhibit A” to the order. The record does not include “Exhibit A.” However, both parties cite to the same TEDRA Agreement that is in the record as the court-approved TEDRA Agreement. 5 The other stated purposes were to: 2) clarify the duties of the Trustee, 3) allow Chris Vivolo, who has very different needs than the other beneficiaries, to enjoy the benefits of trusts that have fewer links to the trusts for the other beneficiaries, 4) allow beneficiaries with greater cash needs to obtain that cash, while providing a method for beneficiaries with fewer cash needs to accumulate funds which may be used to purchase other trust property or diversify, 5) avoid further litigation. 3 No. 85676-6-I/4

The Agreement states, in relevant parts:

A. Definitions .... The “Non-Exempt Trusts” are defined as the Vivolo Family Irrevocable Trusts for the benefit of Ron Vivolo, Steve Vivolo, Nick Vivolo, Vance Vivolo, Joseph Vivolo and Chris Vivolo, which are the surviving trusts after the merger of the Vivolo Family Irrevocable Trust, created by Iona Vivolo during her life, the Tony Vivolo Residuary Trust created in his Last Will and Codicils, and the Non-GSTT Exempt Trust created under the Last Will and Testament of Iona Vivolo. Initially these were three single trusts each with six separate shares, and after the 2008 merger the single Vivolo Family Irrevocable Trust, with six shares, was converted to six separate trusts....

3. Provisions regarding the Non-Exempt trusts. 6 .... b. Article V 2 (e) of the Non-Exempt trusts shall be amended to read as follows: “(e) General Power of Appointment. Whether or not a Child survives the Grantor, each Child shall have the power to appoint in his Will to such appointee or appointees whomsoever, on such terms and in such amounts as he shall determine, all of the remainder of his Share (“the Appointive Property”). To the extent a Child fails to exercise such power, the Appointive Property shall be distributed as otherwise provided in this Agreement. I intend this power of appointment to be a taxable “general power of appointment” as described in IRC Sec. 2041 exercisable in favor of the Child’s creditors, his estate, or the creditors of his estate.” c. Article V 2 (c) of the Non-Exempt trusts is amended to read as follows: “(c) Death of Child.

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