[WSBAPT] what qualifies as a cost of administration?

[Randolph Petgrave]

Marilyn,

I think those items listed would definitely constitute costs of administration.  RCW 11.48.050 states in part that the PR "shall be allowed all necessary expenses in the care, management, and settlement of the estate."  This is regardless of whether the debts and liabilities end up exceeding the assets.  In addition, your client can receive a reasonable fee for his services as PR, so the time he put into getting the property ready for sale etc etc. can be considered administration expenses (as well as any attorney fees per RCW 11.48.210).

RCW 11.76.110 sets forth the priority of creditor rights.  Costs of administration take priority over debts given preference by law; state taxes or debts.

I have been in a similar situation with DSHS.  When I laid out the law and proved the inability of the estate to pay any debts after costs of administration, they backed off.

Good luck,

Randy

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Marilyn J Kliman Law
Sent: Thursday, March 9, 2017 10:33 AM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] what qualifies as a cost of administration?

Folks -

Out-of-state sole surviving heir, son of decedent & appointed PR, had to come here to clean up hoarder mom's house to make it saleable. He spent substantial time away from work and bookoo bucks for cleaning, hauling, etc,, in addition to the cost of  airfare. Normally, of course, it wouldn't matter how costs were categorized as it would eventually all come out of the same pot for a sole heir.

However, DSHS has a substantial lien on the house - the only asset - likely exceeding the value of the property. They have agreed to accept a reduced percentage but, depending on what the house sells for, the DSHS recovery may eat up what's left when it's their turn, a la  RCW 11.76.110, leaving nothing for the son.  Seems only reasonable that, at very least, son should not end up in the negative for out-of-pocket costs. (We did negotiate the reduced lien with DSHS before advising son to even open probate vs. walking away, but son has since discovered greater debt than anticipated.)

So ... I have not found any definitive law or rule as to what constitutes "costs of administration."  Technically, is maximizing the estate value by coming here and cleaning up the house an administrative expense? My thought at this point is to submit all out-of-pocket costs as expenses and let DSHS object if they care to.

Thoughts and wisdom?

Marilyn J. Kliman, Attorney at Law
Marilyn J. Kliman Law, PLLC
510 Bell Street
Edmonds, WA 98020
206.499.0993<tel:206.499.0993>
Marilyn at MarilynJKlimanLaw.com<mailto:Marilyn at MarilynJKlimanLaw.com>
www.MarilynJKlimanLaw.com<http://www.marilynjklimanlaw.com/>
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