[WSBAPT] Allocation of Estate costs to specific property causing the cost

Fri Nov 20 10:15:54 PST 2015

If there is no agreement or directions from the beneficiary who is expected to receive a specific gift and there would be a substantial impact on an heir or group of heirs, then this would be a perfect situation for the PR to Petition for Instructions.  A PR with nonintervention powers can invoke the power of the Court for a specific issue and allow the Court to take the lead in determining a potential controversy concerning the administration of the Estate before it actually becomes a dispute.  RCW 11.96A.020(2) and RCW 11.96A.040(3).

I like this tool when the PR is in a tough spot or there is likely to be a fight on the horizon.  It is transparent and helps shifts some of the risk posed by taking a particular action from the PR and places it back in the court’s hands.  The Petition for Instructions can lay out the facts, propose a course of action and alternatives, and ask the court to enter an order endorsing the correct path.  It gives everyone notice and an opportunity to object before any perceived damage has been done.  And gets the court’s seal of approval in advance for the PR’s actions, which should cut off or quell complaints and challenges later.  Heirs will more readily accept the negative consequences of a course of action that was directed by the court, than one independently decided by and acted on by the PR.  Also, it is usually a lower administrative cost to ask for directions from the court in advance, rather than respond to challenges for waste or mismanagement of the estate later.

Tara M. Roberts

Puget Sound Law pllc

roberts at pugetsoundlaw.com

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Thursday, November 19, 2015 9:53 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Allocation of Estate costs to specific property causing the cost

Yep--I can understand the equitable argument, and I know it's a common practice in administering estates. I just can't find any actual legal authority for a PR to allocate expenses in that way, absent agreement of the involved beneficiary.

Sincerely,

Eric

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1320 University St

Seattle WA  98101-2837

phone 206-625-0092

fax 206-625-9040

From: wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com>  [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Heather deVrieze
Sent: Thursday, November 19, 2015 9:20 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Allocation of Estate costs to specific property causing the cost

Eric,

I have, without specific statutory authority, but what I see as common sense offset expenses related to specific property against income from that property. For example, rental property which is gifted to a particular beneficiary has rental income, out of the rents taxes, insurance, even mortgage payments on that property can be made, with the net rents due to the specific beneficiary. If there is no income against which to offset the expenses, I think there is an argument to be made that the beneficiary of the property owes the cost of those necessary items (property taxes, etc.), but if they didn’t have a say (like the new roof) it might be harder to argue.

Heather

Heather S. de Vrieze
Attorney-at-Law

3909 California Avenue SW

Seattle, WA 98116-3705                          

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 <mailto:heatherd at westseattlelaw.com> heatherd at westseattlelaw.com 

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From: wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com>  [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Wednesday, November 18, 2015 5:23 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> >
Subject: Re: [WSBAPT] Allocation of Estate costs to specific property causing the cost

I didn't get many responses, but so far no one has come up with any case law or theory that avoids the basic rule under Ch. 11.10 RCW, where estate expenses and debts simply abate estate property ratably in accordance with their classification as gifts. So, I think the authority I thought was out there, ain't.

Sincerely,

Eric

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1320 University St

Seattle WA  98101-2837

phone 206-625-0092

fax 206-625-9040

From: wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com>  [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Eric Nelsen
Sent: Friday, November 06, 2015 12:09 PM
To: WSBA Probate & Trust listserve (wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> )
Subject: [WSBAPT] Allocation of Estate costs to specific property causing the cost

I cannot find the authority that I swear is out there--

Estate expenses (costs of administration, post-death expenses) are normally paid from estate assets pursuant to the abatement statutes, RCW 11.10.

But, if the Estate includes an item property that causes specific expenses – for example, a house that requires a new roof to prevent new substantial damage from leaks during the rainy season, or even just payment of delinquent real property taxes – it is permissible to charge those specific expenses against that specific property.

In such a case, if the property is given to a particular heir (by specific bequest, or other distribution in kind), that heir's share of the estate is therefore charged specially with those expenses.

Anyone have authority, statutory or case law? Or am I searching for something that isn't there?

Sincerely,

Eric

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1320 University St

Seattle WA  98101-2837

phone 206-625-0092

fax 206-625-9040

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