trust distribution

George X. Riddell and his wife Irene A. Riddell established separate trusts for the benefit of their son Ralph A. Riddell, his wife Beverly, and their grandchildren Donald H. Riddell and Nancy I. Dexter. George's will created a testamentary trust, and he also created a life insurance trust; Irene's will created another testamentary trust. The trusts directed that upon the deaths of Ralph and Beverly, the grandchildren would receive benefits until age thirty-five, at which point the trusts would terminate and distribute the principal outright to them. Both George and Irene are now deceased, and Ralph serves as the current trustee. Ralph and Beverly have two adult children: Donald, a practicing attorney capable of managing his own affairs, and Nancy, who was diagnosed with schizophrenia affective disorder and bipolar disorder. By 1991, Nancy required extensive outpatient care, and by 1997 she was residing at Western State Hospital, where she is expected to remain for the rest of her life without the ability to live independently. Both Donald and Nancy are now over thirty-five years old. Upon the deaths of Ralph and Beverly, the consolidated trust, valued at approximately $1,335,000 with Nancy entitled to roughly half, is set to terminate and distribute her share directly to her. Ralph petitioned the superior court to consolidate the trusts and modify them by creating a special needs trust for Nancy's benefit instead of making an outright distribution. He argued that direct distribution would expose the funds to seizure by the State of Washington for her medical care or result in poor management due to her condition. The trial court granted consolidation but denied the modification request. It concluded that modification was inappropriate absent unanticipated circumstances defeating the trust's purpose of providing for education, support, maintenance, and medical care. Ralph moved for reconsideration, which the trial court also denied after incorporating its oral rulings. Ralph then appealed the denial to the Court of Appeals of Washington, Division 2.