[WSBAPT] Abatement Involving Nonprobate Account and no Residue

[Roger Hawkes]

Tedra, tedra☺


Roger Hawkes, WSBA # 5173
19909 Ballinger Way NE
Shoreline, WA 98155
www.hawkeslawfirm.com<http://www.hawkeslawfirm.com/>
206 367 5000
Fax is 206 367 4005

From: sullaw at comcast.net [mailto:sullaw at comcast.net]
Sent: Wednesday, February 10, 2016 10:20 AM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Abatement Involving Nonprobate Account and no Residue

Listmates:

Maybe one of you have dealt with a similar abatement issue and can answer this. I just don't run into it very often.

Decedent’s Will has standard provision saying admin expenses, claims, taxes payable by residue. At the time the Will was made the investment account intended to constitute the residue was titled in her name only. Then she moves the account to another brokerage which sets up the new account as a JTWROS or TOD account to the three residuary beneficiaries. There is also a checking/saving account that is JTWROS with my client – one of the three but also the PR. This was intentional. The Will contains a specific devise/bequest of the house and all its tangible contents to my client, who is also a residuary beneficiary and the PR. He is on SSDI, so maximizing his inheritance is an objective.



In all likelihood the deceased client or the new brokerage made a mistake setting up the main account as JTWROS/TOD.  In any case, the result is that there is nothing in the probate residue. The only assets passing under the Will are the house and its contents, which go specifically to my client.



My question is: to what extent can the PR compel the other two beneficiaries of the JTWROS/TOD account share in the expenses of administration/income taxes/creditor claims? (This estate will not file an estate tax return.)



I’m looking at the abatement chapter. RCW 11.040(2)(a) and (3) seem to suggest that the specific devise/bequest under the Will and the JTWROS/TOD accounts are in the same category and abate ratably. See also RCW 11.10.010(5).



RCW 11.18.200 says that beneficiaries of nonprobate assets take subject to the liabilities, claims and “fair share of expenses of administration reasonably incurred by the personal representative in the transfer of or administration upon the asset.” Does that mean I can’t burden the nonprobate assets with the expense of opening the probate, advising the PR, etc.? Do I have to somehow source particular administrative expenses to particular assets? How about income tax return preparation fees? See RCW 11.18.200(2)(c)&(d).

Thanks in advance for any experience or wisdom.

Best regards,

John J. Sullivan<mailto:dlyons at lyonslawoffices.com>,

Attorney



Lyons | Sullivan

10655 NE 4th Street, Suite 704

Bellevue, WA  98004

425·451·2400 tel 425-451-7385 fax

www.dljslaw.com<http://www.dljslaw.com/>



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