[WSBAPT] Insolvent estate - not sure

Mon Jan 7 16:44:49 PST 2019

It's so sad when the family has to spend unnecessary funds trying to do what they think the deceased person would have wanted.

Candace Wilkerson

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Dalynne Singleton
Sent: Monday, January 7, 2019 2:55 PM
To: John White <white at livengoodlaw.com>; WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Insolvent estate - not sure

Thanks for your advice.  I read the statute for solvency but then had my own hearing on the insolvent estate after non-intervention powers were granted which basically allows for keeping non-intervention powers leading me to believe that they can be given at the outset.

The granddaughter wants to honor her grandmother and try and keep the home from foreclosure, having someone buy it at short sale and someone who will take care it as her grandmother would have wanted.  The bank seems to want to work with her but demands Letters.  It is more sentimental value to her and she wants to try.  I have warned her about other claims but she swears there are no other debts.

Dalynne Singleton

Gourley Law Group
Snohomish Escrow
The Exchange Connection
1002 10th Street / PO Box 1091
Snohomish, WA 98291

360.568.5065
360.329.4079
360.568.8092  fax
dalynne at glgmail.com<mailto:dalynne at glgmail.com>

LICENSED IN WASHINGTON AND OREGON
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From: John White <white at livengoodlaw.com<mailto:white at livengoodlaw.com>>
Sent: Monday, January 07, 2019 2:44 PM
To: Dalynne Singleton <dalynne at glgmail.com<mailto:dalynne at glgmail.com>>
Subject: RE: Insolvent estate - not sure

Dear Ms. Singleton:

The statutory conditions to grant of non-intervention powers include the following:

the court shall grant nonintervention powers to a personal representative who petitions for the powers if the court determines that the decedent's estate is solvent, taking into account probate . . .

RCW 11.68.011(2).

The court may base its findings of facts necessary for the grant of nonintervention powers on: (a) Statements of witnesses appearing before the court; (b) representations contained in a verified petition for nonintervention powers, in an inventory made and returned upon oath into the court, or in an affidavit filed with the court; or (c) other proof submitted to the court.

RCW 11.68.011(3).

There must be evidence of solvency.  Failure to pay the debt secured by a residence is not necessarily evidence of insolvency.  (As a general proposition, there could be other, non-liquid assets.)  However, in your case, you've indicated that a short sale would be negotiated, which indicates that the estate is not solvent.  If the assessor records show solvency, that could be sufficient evidence.

The more basic question posed by one of the other commentators is pretty spot-on.  Why take this on as a P.R.?  Little good can come of it from the P.R.'s perspective.  If the mortgage did not get paid, what about federal income taxes, for which the P.R. may have personal liability under 31 U.S.C. 3713?

[cid:image005.jpg at 01D4A6A8.950EF910]

John J. White
425.822.9281 Ext. 7321
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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Dalynne Singleton
Sent: Monday, January 07, 2019 1:38 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Insolvent estate - not sure

I have opened a new intestate probate and have a hearing tomorrow in Snohomish, having provided notice to heirs.  I am asking that the Administrator to be appointed in the granddaughter as none of the 3 daughters want anything to do with the estate.  The only asset is the home and real property which is in disarray.  A foreclosure hearing is set for 1/10/19 and the granddaughter is interested in working with the mortgage company, who seems agreeable, to getting a short sale.

I have researched RCW 11.68.080 and insolvency.  Although I am assuming because of the current condition, the home is not worth what the current mortgage owed is, is the estate insolvent because of this knowledge?  My reading of the statutes have not provided me with this conclusion and until an actual claim is made against the estate by the mortgage holder, is the estate solvent?  Due to the foreclosure hearing on 1/10/19, we want to provide Letters to the administrator after tomorrow's hearing.  We would prefer non-intervention powers but I don't think it is a deal breaker.

Although some have expressed the opinion on the listserve that it is mandatory to have full intervention powers with insolvent estates, I don't read the statutes to be this clear.  In King County, the probate manual states:

Solvency - an Absolute Requirement for Nonintervention Powers:  To obtain Nonintervention Powers, the estate must be solvent, that is, it must have "more assets than debts and expenses."  King County, for example, defines solvency as "the value of Decedent's probate assets and nonprobate assets exceeds the anticipated amount of Decedent's debts and the costs of administration."  2003 King County Probate Policy & Procedure Manual, § 4.2.

I have opened estates which were solvent, received creditor's claims for more than the assets and gone back to court to declare insolvent estate.  The statute that allows for this clearly states the non-intervention powers can be reaffirmed, rescinded or restricted.  The Pierce County Commissioner was surprised to learn this and left the non-intervention powers in place.  Why would the initial opening of the estate be any more restrictive on the non-intervention powers?

I'd like to hear if anyone has obtained non-intervention powers when an estate has as its only asset the home/real property and a mortgage with foreclosure in process?

Dalynne Singleton

Gourley Law Group
Snohomish Escrow
The Exchange Connection
1002 10th Street / PO Box 1091
Snohomish, WA 98291

360.568.5065
360.329.4079
360.568.8092  fax
dalynne at glgmail.com<mailto:dalynne at glgmail.com>

LICENSED IN WASHINGTON AND OREGON
IMPORTANT/CONFIDENTIAL: This e-mail message (and any attachments accompanying it) may contain confidential information, including information protected by attorney-client privilege. The information is intended only for the use of the intended recipient(s).  Delivery of this message to anyone other than the intended recipient(s) is not intended to waive any privilege or otherwise detract from the confidentiality of the message.  If you are not the intended recipient, or if this message has been addressed to you in error, do not read, disclose, reproduce, distribute, disseminate or otherwise use this transmission, rather, please promptly notify the sender by reply e-mail, and then destroy all copies of the message and its attachments, if any.
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