[WSBAPT] The story changes..... Gift vs. Unrecorded Mortgage

[Brent Williams-Ruth]

Good Morning and Happy Friday list!

My prior email is amended as my client has given me the entire backstory.
Many twists, any guidance is appreciated. Will be hitting the books this
afternoon to find the answers.

There exists (so says my client, I have not seen it personally yet) a
letter between client/personal representative - the surviving spouse,
Decedent, and "Mrs. Smith" who gifted the two of them $100,000. (The only
document allegedly in existence is that this money is a gift and not
expected to be repaid).  Surviving Spouse is going back to look to see if
money was reported to IRS as gift - though I find it unlikely.

Apparently, Decedent was sending money, over $12,000 since then to Mrs.
Smith. This was done without knowledge of the surviving spouse.

Fast forward to January 2018. Two weeks after Decedent passed, Mrs. Smith
tells Surviving Spouse that Decedent was paying her off, and that they had
been meaning to sign contract/agreement saying that money was a loan and
interest would be due with payment - but to the surviving spouses'
knowledge, no such document was ever created or executed.

Mrs. Smith is calling for repayment, plus interest. She wants all money now
but is willing to just let Surviving Spouse pick up where Decedent left off
- but charging interest.

Questions that are running through my head (and please feel free to let me
know if I have missed a question that I need to look up)

1) Since there is, currently, no other known document signed by all three
(a marital community and Mrs. Smith) other than the Gift letter - do I stop
right there and just make sure that they amend the 2016 tax return to
declare such a gift (assuming it was not done originally)?

2) If I don't stop, and there IS a signed contract between Decedent and
Mrs. Smith only indicating that the arrangement was a non-recorded mortgage
with interest due - would Garn-St. Germain apply where Mrs. Smith is
prohibited from calling the note;

3) Would such a mortgage contract even be enforceable under Washington law
given that as a community asset, Decedent encumbered the property without
the knowledge and consent (and signature) of Surviving Spouse who has the
good faith belief that this was a gift?

​Thank you again for any suggestions on where to start my dive into coming
up with a solution for my client.

Brent​

-- 

*Brent Williams-Ruth*
*Founding Member*

*BWR Consulting, PLLC*

Phone: (425) 830-5134

e-mail <brent at bwrconsults.com> / website <http://www.bwrconsults.com> /
facebook <http://www.facebook.com/bwrconsults>
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