[WSBAPT] 2nd Try: is PR responsible for RE taxes

Mon Mar 14 09:58:49 PDT 2016

Melinda, 

	RCW 11.04.250 says that title vests immediately in heirs, but it vests subject to the decedent's debts, family allowance, expenses of administration, and any other charges for which the real property is liable. So, title vests immediately upon death, but that title is subject to certain encumbrances that may or may not have become known or final as of date of death, sort of like any relation-back lien such as a reverse mortgage, home equity loan, contractors and crop liens, and so on. Some encumbrance amounts will be known, some probably won't.

	But that raise an excellent point. Take for example family allowance/support awards under 11.54. They are specifically encumbrances on the real property under 11.04.250. They are supposed to be awarded "from the property of the decedent," community or separate. The award is to be treated like a general creditor of the estate, and assets for these purposes abate in order under 11.10.010 That doesn't necessarily answer the question, as the abatement statutes are about whether the property is intestate, residuary, general or specific, not whether it is real property that vests upon death. And you don't get to family allowance/support awards unless funeral expenses, last sickness expenses, and administrative expenses have been paid or provided for.  

	I am sure others will see things I don't, but to me, the property that vests as of date of death vests subject to certain encumbrances. It doesn't matter when the deed is recorded. But how those encumbrances are paid is the question. Real property taxes due prior to the date of death are in theory the responsibility of the estate, but if not paid, they follow the property as encumbrances. Real property taxes due after the date of death are still encumbrances against the real property, but until the estate deeds the property to the heirs, the taxes are the responsibility of the estate. The estate can pay the taxes out of the estate in order under 11.10.010, starting with intestate assets and then on to residuary gifts, then general then specific. Or the estate could deed the real property to the heirs. But if the estate deeds the real property to the heirs, without paying the taxes up to that point, then it comes along with an encumbrance for the total amount due. 

	Here, it is interesting that the Treasurer's office will not require real property taxes be paid current upon transfer by a Personal Representative, unless there is a manufactured home involved, or a boundary line adjustment sometime in the past. They have no readily-available citation for that position, although there may be one somewhere. So this can be an actual choice of the PR. 

	I suppose in your situation, you could have the PR deed out the real property, and if the Treasurer does not require that the taxes be paid upon the transfer, then the taxes are an encumbrance on the real property, not the estate, and the creditor's claim may not lie against the estate. I just did a quick look, and don't see that real property taxes can be collected except by tax sale (and not by a claim against the owner personally) , although I could be wrong on that. If that is the case, then the County's creditor's claim may not be such a great idea, especially given that it can always collect on its security without a creditor's claim under 11.40.135. 

	I would love to hear other thoughts or disagreements. 

Rob

Robert D. Wilson-Hoss 
Hoss & Wilson-Hoss, LLP 
236 West Birch Street 
Shelton, WA 98584 
360 426-2999
www.hossandwilson-hoss.com
rob at hctc.com

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-----Original Message-----
From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Bryce Dille
Sent: Saturday, March 12, 2016 11:34 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] 2nd Try: is PR responsible for RE taxes

I'd take the position that taxes owing as of date of death was estate responsibility but any taxes due after date of death was responsibility of heirs receiving the same as a specific bequest the same as would be payments on mortgage encumbering the property.

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Bryce H. Dille
Campbell, Dille, Barnett & Smith,  PLLC
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bryced at cdb-law.com

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-----Original Message-----
From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Melinda
Sent: Saturday, March 12, 2016 11:15 AM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] 2nd Try: is PR responsible for RE taxes

Mates:

Creditors Claim filed by County Treasurer for prop taxes on RE in the Estate.  Claims refers to 2016 taxes.

Probate opened 4 months ago (late 2015), property deeded to heirs now.  Since the law states that ownership by heir essentially begins at death of testator, are the property taxes from Testator’s DOD the responsibility of the receiving heir?  Or the responsibility of the Estate until date of actual transfer deed?  

Misspelled from my iPhone

Melinda

Law Office of Melinda K Grout
PO Box 1360
Monroe, WA 98272
(360) 794-4322. Tel
(425) 744-6745. Fax

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