[WSBAPT] Suit Against Trust v. Opening Probate - Legal Leap

[John Creahan]

I would phrase this a little differently.
Assuming that the creditor's claim is against the decedent (and not directly against her revocable living trust, which would be very unusual), the creditor needs to follow normal probate procedures. If no probate is opened and no notice agent appointed, I agree with Marcus that the creditor's only option would be to open a probate, or at least threaten to do so.
Once a claim has been allowed, the assets held in the revocable living trust are available to satisfy the claim, as provided in RCW 11.18.200 (2)(e):
A trust for the decedent's use of which the decedent is the grantor is subject to the decedent's liabilities, claims, estate taxes, and administration expenses as described in subsection (1) of this section, to the same extent as the trust was subject to claims of the decedent's creditors immediately before death under RCW 19.36.020<http://app.leg.wa.gov/RCW/default.aspx?cite=19.36.020>.
I don't think the decedent's revocable living trust would be liable for the decedent's pre-death debts unless the claim had been previously approved by the probate court.
My $.02.
John

John Creahan
www.cairn-law.com<http://www.cairn-law.com/>
Now located in the heart of Fremont
3417 Evanston Ave. N, Suite 312
Seattle, WA 98103
206-578-5877


From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Marcus Fry
Sent: Wednesday, February 15, 2017 9:32 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Suit Against Trust v. Opening Probate - Legal Leap

Paul:
I am one of the attorneys that asked the question.  First, to answer your questions about trusts, RCW 19.36.020 answers the question.  We do not have self-settled protection trust laws (there is about 15 states that do however).  You place your assets into a trust for your use and benefit, such assets will be available to creditors.  Second, I think the probate route is a good idea if you are unsure there is a trust because you get a personal representative appointed who then has authority to look into the affairs of the decedent and obtain trust documents, etc.  My situation was a little different as I knew there is a trust and I also knew that the trust owns assets, in my case real estate.  My question was whether I could just take legal action against the trust as a creditor of the decedent without having to go the probate route first because I am aware of the existence of the trust and the assets held by the trust.  I think I can because the trust continues in existence after death.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
P.O. Box 1689
Yakima, Washington  98907
Telephone:  (509) 248-7220
Facsimile:  (509) 575-1883

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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 Paul Neumiller
Sent: Wednesday, February 15, 2017 9:14 AM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Suit Against Trust v. Opening Probate - Legal Leap

There has been a recent post asking how can a creditor collect from a rumored trust when the family doesn't open a probate.  Some have suggested that the creditor should open a probate.  But how does that work?  If all of the deceased's assets are in a trust (so the deceased, in effect, dies penniless) how does opening a probate get to the assets of the trust?  How does the personal representative/creditor even learn about the trust?  I know there must be a RCW somewhere that addresses this because if a person can frustrate the collection efforts of creditors by using a trust, we would all dump our assets into revocable trusts (I envision my wife power shopping at Nordstrom while I'm on my death bed.)  On a practical matter, would the creditor open the probate, bring a TEDRA action, and then use discovery to learn about the existence of the trust?

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