[WSBAPT] Community Property Debt - Claim Period Expired

[Eric Nelsen]

Jeanne--I agree with you based on the language in the case law, but I haven't been able to find a case where a community debt that also looks like a direct personal debt of the surviving spouse was barred from collection. I think, from a creditor's perspective, a person is liable for debts she directly and voluntarily incurs, and her marital community might also be liable if it's incurred for the benefit of the community.

If I filed suit as plaintiff on a debt, I'd name the individual who incurred the debt, and their marital community, so that I could get a judgment against the individual's separate property as well as their share of community property.

But on the other hand, when representing an estate or a surviving spouse I've made the same argument that you are making, based on the same case law: that all community debts must be resolved in the estate of the first spouse to die.

Until now, I haven't had to directly address what feels like a contradiction. Maybe the difference is, the surviving spouse is directly liable for her own medical bills, regardless of whether the community also could be held liable?

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

Please Note that We Have Moved. We have moved our Seattle office to Mount Baker Ridge (a small commercial community just above the I-90 tunnel). Our new address is 1417 31st Avenue South, Seattle WA 98144. All other contact information remains the same.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Jeanne Dawes
Sent: Tuesday, March 07, 2017 10:34 AM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Community Property Debt - Claim Period Expired

Dear Listmates:

I had a situation where the creditor claims exceeded assets of estate.  I was able to obtain releases from all of the creditors without having to declare the estate insolvent.  Claim period expired all is good.  Except, a collection agency (who had filed 2 claims in the estate and then released them without payment based on our inventory) is now sending a bill to surviving spouse for a debt incurred by the community prior to her husband's death.  The attorney for the collection agency says the bill was medical services provided to the surviving spouse, and that the creditor can continue to pursue the surviving spouse for payment.    I do not know why the collection agency did not make a claim for this when they made two other claims against the estate.  Had they made the claim we would have disposed of it as we did the other two (Creditor agreed to release without payment).  It seems contrary to the concept of the claims statute, that a creditor could refrain from filing a claim against the estate,  only to continue collection action against the surviving spouse.  This is a community debt, I don't think the character of the debt changes.

It is my understanding RCW 11.40 disposes of all community debt for which claims were not filed.  I provided the attorney the Sutton v. Hirvonen case, which is the case cited by the Community Property Desk Book for the premises that RCW 11.40 will extinguish all debts for which claims have not been made, including community debts, along with  RCW 11.02.070 and the rationale explained in the Community Property Desk Book.    Collection Attorney said he read Sutton, but does not believe it would apply because,

"The reason Mrs. Hirvonen had no individual liability is because she was not the tortfeasor.  RCW 26.16.190 states that if she was not the tortfeasor she has no liability.  There was a claim against Mr. Hirvonen and the marital assets.  Thus a claim against the estate of Mr. Hirvonen was necessary to proceed against marital assets."

I believe his argument is because the medical services were provided to surviving spouse, and not deceased spouse, creditor can continue to try to collect from surviving spouse.   What say you?  If I'm correct and the claim statute does eliminate the debt is there some other authority I can provide to the Attorney.

Thanks in advance.



Jeanne J. Dawes
Attorney at Law
Gore & Grewe, P.S.
103 E. Indiana Avenue, Suite A
Spokane, WA 99207-2317
Voice:  509-326-7500
Fax:      509-326-7503
jjdawes at goregrewe.com<mailto:jjdawes at goregrewe.com>
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