Rebuilding With Our Beneficiaries

The 2014 Summer Inferno

Stephen Trefts, President

Stephen Trefts, President

It was a dangerously hot and dry July when the lightning bolts ignited the tinder dry forest floor. The searing winds united four different fires into the largest wildfire in Washington State history — the Carlton Complex Fires.

Cheryl, our hardworking and resourceful trust beneficiary, enjoyed a quiet life with her horses and dogs in the Okanogan Valley on land owned by the family trust. As the blood red sun hung in the smoky haze, Cheryl tried rounding up her horses from the hills while the roar of the wind and fire sounded like jet engines all around her. Within minutes of getting back in her house, a neighbor warned her to leave immediately. She grabbed her cowboy boots, laptop and a can of dog food, leaving all of her belongings and one of her beloved horses behind. One mile down the road, she passed the first responders going up to the fire; she was about 5 minutes ahead of the engulfing flames.

After the cataclysm passed, the state took stock of the losses — 350,000 seared acres, 300 homes destroyed, hundreds of cattle killed and orchards incinerated. As Cheryl walked over her property, it was as if she was viewing an eerie war scene. Trees had literally exploded in the heat, and what was once her home was little more than mounds of molten metal.

As trustee, we are teaming with Cheryl to help rebuild her life. This includes retaining a salvage logger to clear the debris, working with environmental consultants regarding reseeding, replanting and rebuilding fences. Most importantly, we are partnering with Cheryl as we work with home designers and contractors to build a new home. “I decided that I wanted a home that would better fit with my lifestyle and be easier to maintain,” she stated.

There are two rationales for trust expenditures. One is to make a trust-authorized discretionary decision to use trust funds to assist the beneficiary. The other rationale is that we can purchase a home as a “trust investment.” In this case, the trust owns the land, and the insurance proceeds for the home are now deposited into the trust account. Cheryl wants to upgrade from the destroyed mobile home that had been her father’s to a cozy two-bedroom house, and so she will also invest her own funds into the new home and retain an equity interest in proportion to her investment.  Therefore, she will not only enjoy a nicer home during her life, but she will also be able pass this equity interest to her heirs. This means that Cheryl, her community, and her heirs will all benefit from the team effort being invested into rejuvenation.

Print Date:  Spring 2015