[WSBAPT] Spousal Award in Lieu of Homestead

Fri Jun 28 09:24:52 PDT 2019

Along those lines of spousal consent, this is from a brief I drafted about 17 years ago:

"In Nichols Hill Bank v. McCool, Jr., 104 Wn.2d 78, 701 P.2d 1114 (1985), the Washington Supreme Court interpreted RCW 26.16.030(2) where a husband guaranteed a loan to a son without his wife's consent.  The loan was discharged in bankruptcy for the son and the bank sought judgment against the husband's separate property and the husband's one-half interest in the community property. The trial court dismissed the claim against the husband's community property.  The Supreme Court held that:

RCW 26.16.030(2) specifically requires the consent of both spouses before a gift of community property can be effectuated. If we found that a creditor could reach the donor spouse's one-half interest in community property, the total amount of that property would be diminished. We would, in effect, be defying the statutory mandate by allowing the community estate to be gratuitously reduced without the consent of both spouses.

Id. at 88.  The Supreme Court affirmed the trial court judgment dismissing the claim against the husband's community property solely because the wife had not given consent.
            A second case is factually similar to this matter. In Bosone v Bosone, 53 Wn. App. 614, 768 P.2d 1022 (1989), a husband and wife entered into a community property agreement that converted all of their separate assets into community property. Unbeknownst to the wife, the husband deeded their residence to his children from a former marriage.  After the husband's death, his children from the former marriage listed the residence for sale and the surviving spouse brought a quiet title action. The Washington Court of Appeals affirmed the trial court's grant of summary judgment to the wife and declared the deed void and invalid under both RCW 26.16.030(2) (requiring consent of both spouses for gift of community property) and RCW 26.16.030(3) (requiring both spouses to join in and acknowledge a conveyance of community real property.)"

[cid:image005.jpg at 01D52D93.37461580]

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of James W. Spencer
Sent: Friday, June 28, 2019 8:28 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Spousal Award in Lieu of Homestead

Hi Dalynne:
Recall too that under RCW 26.16.030(3), "[n]either [spouse] shall...encumber the community real property without the other spouse...joining in the execution of the deed or other instrument by which the real estate is...encumbered, and such deed or other instrument must be acknowledged by both spouses....

I believe your client would have a defense against the debt secured against the real property if she genuinely did not know about it.

Best wishes,
James

James W. Spencer
Brothers & Henderson, P.S.
2722 Eastlake Avenue East, Suite 200
Seattle, Washington 98102
Phone: (206) 324-4300 x106
e-mail:  jamess at brothershenderson.com<mailto:jamess at brothershenderson.com>
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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 Jen Doehne
Sent: Thursday, June 27, 2019 1:51 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Spousal Award in Lieu of Homestead

Hi Dalynne,
I've done a couple of these and they work similar to priority creditors.  You file the request with the court, schedule a hearing on the issue, if/when the court approves, your client has either $125,000 in protected value in the home OR $125,000 cash if there are liquid assets available. As far as creditors go, it basically puts the spouse ahead of most creditors...also keep in mind, it could push the estate into insolvency, but she would still be preserved in that basic spousal award.

Be aware that if decedent had any children from prior marriages, those children are eligible to split the homestead award with the surviving spouse by filing a motion requesting the same.  In this case, the court will decide how to divide the award.

Best,
Jen

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Dalynne Singleton
Sent: Thursday, June 27, 2019 1:35 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Spousal Award in Lieu of Homestead

I have a new client just came in and her husband died a few months ago leaving $70k in debt.  They own a home in Snohomish worth $270,800, community property, no mortgage.  However, there appears to be $70,000 in unsecured debt credit cards the wife was really unaware of... husband took care of finances.  Also another loan with Chase for $18,000 in 1995 that she is still getting information on - Chase is telling her the home was used as security but she had no idea about that.  They also own land in Port Townsend that she wants to sell worth approximately $8800, community property as well.  She was left with less than $10,000 and $1600 month income in social security.  Nothing else.

Seems the best way to help her is to file for a spousal award in lieu of homestead.  I have some samples of pleadings so will be doing the docs after appointment.
Husband's half of community property interest in the home in Snohomish would be $135,400 and with $88,000 in debt, the homestead would be $125,000.
I found information online from http://probate-litigation.com/C-Rights-Specific-Individuals.htm<https://eur01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fprobate-litigation.com%2FC-Rights-Specific-Individuals.htm&data=02%7C01%7C%7Ce81066d3313b4077d8b008d6fbddd1c4%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636973327524273253&sdata=4H2bHBbqzex2DhXKAgjqAaFKnqACQRITrG1IUKQ5jj8%3D&reserved=0> and will update cites and review RCW.

The major benefit of receiving property as a family award is that, with few exceptions, it takes priority over all gifts, taxes, and claims in the estate, for example, all debts, including judgments and judgment liens, of the Decedent and the surviving spouse occurring at the Decedent's death.  RCW 11.54.070

Thanks for any insight you can provide to assist me in applying for the spousal award after I have her appointed PR of the estate.
I will be in Snohomish.

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>

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