[WSBAPT] Can trust deed lender reach non-probate assets?

[Heather deVrieze]

I always make sure to give Direct Notice to Creditors to the lender in these situations, and if memory serves, it is because a lender can utilize our Judicial Foreclosure instead of a non-judicial foreclosure and get a deficiency judgment in that case.

Not sure what best practice is, but it is what I do.

I think the unasked question is how a Personal Representative can “walk-away” from a probate while this is outstanding? I’m not sure they can, without a Court Order. Might need to give notice to creditors to lender, wait requisite time (later of 4 months from publication or 30 days) ask court to allow Personal Representative’s resignation or request discharge leaving this issue outstanding. I try to discourage clients from getting a probate opened where the only significant probate asset is an under water or upside down property.

Heather

Heather S. de Vrieze
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Teunis J. Wyers
Sent: Tuesday, November 10, 2015 3:07 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Can trust deed lender reach non-probate assets?

I have a probate which is ready to close, but for a trust deed foreclosure on the decedent's residence. The property is substantially "upside down"; it has a bad well, so is not marketable. The PR wants to abandon the property and let the bank take it.  It is vacant. The PR is the decedent's only sibling, is the sole beneficiary under the will, and received a substantial non-probate bank account held as JTWROS with the decedent.
My spin on this is that since the lender cannot obtain a deficiency judgment under the trust deed statutes, the non-probate asset (bank account) is not exposed. Am I on the right track here?

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