[WSBAPT] Probate Reality Check

Thu Aug 25 12:32:49 PDT 2016

As it turns out, Medicaid is NOT an issue.  Sister was turned down for Medicaid because she had a $30K IRA which the family is currently spending down for her care.  Sister also has substantially cut food intake (remember, she’s in hospice care and is not expected to last long.)  With death imminent (yeah, I know, you never know. My own father went in and out of hospice care three times before he finally died), the family may just hold off the probate until Sister passes.

Because it seemed a relevant question and several attorneys asked for my research results, I kept up the question regarding the fiduciary’s conflict of interest for an IRS disclaimer.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of J A Cyphers
Sent: Thursday, August 25, 2016 11:46 AM
To: Probate List Serve <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Probate Reality Check

I have a vague recollection that if sister is on Medicaid, then DSHS prohibits a disclaimer.  

I see a 2007 note that says DSHS considers qualified disclaimers to be transfers subject to penalty and cites http://www1.dhsh.wa.gov/esa/eazmanual.

Don't know if that will work.

I assume the sister has outlived whatever survivorship clause is in the mother's will.  So her interest has vested.

Does the POA from sister to brother specifically authorize disclaimers??  As I recall it has to be specifically authorized under the old POA statute and the new POA statute is not effective yet.

If it does, you can certainly argue that sister foresaw the conflict of interest and approved it.    

Jackie Cyphers

Jeannette A. Cyphers, Attorney at Law

P. O. Box 908   

Edmonds, WA 98020-0908

425-776-5887

fax 425-640-0814

 <mailto:jacyphers at gmail.com> jacyphers at gmail.com

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-------Original Message-------

From: Paul Neumiller <mailto:pneumiller at hotmail.com> 

Date: 8/25/2016 11:17:04 AM

To: 'WSBA Probate  <mailto:wsbapt at lists.wsbarppt.com> & Trust Listserv'

Subject: Re: [WSBAPT] Probate Reality Check

Yeah, I’m been thinking about that but I’m not sure it passes the “smell test.”  Sister is mentally disabled but Son, her brother, has her POA.  Mom’s Will says Son gets everything if Sister predeceases Mom and Sister’s Will gives everything to Son.  So, on one hand, Son is signing, as a fiduciary, a disclaimer which benefits him and creates a conflict of interest.  On the other hand, who cares because he gets everything anyway and there is no one around to complain/object because Sister never married and has no children.  Under Sister’s POA, Son has already started to pay her debts and bills.  Son plans on paying for all of Sister’s medical debts so I don’t think we will have any abandoned creditors.

I wasn’t able to find any cases discussing IRS disclaimers and a POA’s conflict of interest.  In the past, I got a self-serving disclaimer by a guardian approved by the court but that was in the context of an existing probate and a separate guardianship.  I could open this probate and petition the court for approval of the disclaimer but that would entail getting a guardian ad litum for Sister, and that’s an expense we are trying to avoid. 

Any thoughts out there regarding Son’s exposure for signing the self-interested disclaimer when he is to receive everything anyway and there isn’t anyone out there to complain or object???

(Apparently there is interest in this topic because I have received multiple emails off-list from attorneys in similar situations asking for the results of my research.) 

From: wsbapt-bounces at lists.wsbarppt.com <mailto:wsbapt-bounces at lists.wsbarppt.com>  [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of David Faber
Sent: Thursday, August 25, 2016 10:32 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> >
Subject: Re: [WSBAPT] Probate Reality Check

Can sister disclaim her interest in mom's estate?

Best,

David J. Faber

Faber Feinson PLLC

210 Polk Street, Suite 1

Port Townsend, WA 98368
(360) 379-4110

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On Tue, Aug 23, 2016 at 3:39 PM, Paul Neumiller <pneumiller at hotmail.com <mailto:pneumiller at hotmail.com> > wrote:

I represent Son.  Mom dies.  Sister, who gets 50% of Mom’s estate (Son get the other 50%), is dying (in hospice care) and incapacitated.  No one knows when she will pass and family thought Sister would have died before Mom died.  Sister is insolvent (and has no heirs) except for inheritance and her Will gives everything to Son, her brother.  Son wants to open Mom’s probate in order to sell Mom’s house quickly.  But, if we open probate, then need to appoint a guardian-ad litem for incapacitated Sister.  Any creative solutions out there?  To complicate the issue, there may be Medicaid collections issues out there for Sister when she passes.

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