[WSBAPT] PR Duty to Respond to Potential Creditors?

[Brent Williams-Ruth]

Apologies if this has been answered into oblivion, but this is one of my
favorite stories to tell.

Had an estate where the City of Seattle had a claim against my
Decedent.....sent the notice as a known creditor and the form complied
strictly with the RCW 11.40.030 example.  The City absolutely blew through
the deadline - by nearly triple.  Representative from the City Attorney's
office called and tried to chastise me because I didn't provide further
information in the notice. They even said they were going to write to the
Executors and tell them how horrible I was. I advised my Executor that they
may be getting a letter telling them how I just saved several thousand
dollars and they should be angry with me. They laughed.

The duty is to the Estate. The creditors have their rights under the
statute but nothing more and the only entity that requires more than the
initial notice is set forth in the Statute (primarily the SSN to the
State).

*Brent Williams-Ruth*
*Attorney-At-Law*

*Law Offices of Brent Williams-Ruth, a division of **BWR Consulting, PLLC*

Office/Scheduling Phone: (425) 830-5134

Direct Mobile: (206) 889-7919

e-mail <Brent at Williams-RuthLaw.com> / website
<http://www.Williams-RuthLaw.com/> / facebook
<http://www.facebook.com/bwrconsults> /

*As of July 1, 2019 - I began operating as the Law Offices of Brent
Williams-Ruth a division of BWR Consulting, PLLC. Please note the new
points of contact Brent at Williams-RuthLaw.com and www.Williams-RuthLaw.com
<http://www.Williams-RuthLaw.com> *


On Wed, Jul 15, 2020 at 6:14 PM Joshua McKarcher <josh at mckarcherlaw.com>
wrote:

> I understand a trustee/PR owing fiduciary duty to
> beneficiaries/heirs/devisees, which suggests a duty to deal fairly, openly,
> and wisely with creditors to minimize risk and cost to the trust/estate and
> its beneficiaries.
>
>
>
> E.g., I push clients to give actual notice to known and ascertainable
> generously to cut off claims promptly – after promptly paying in full all
> valid claims. This is proper and is loyal to the beneficiaries (because it
> keeps them from trouble). But then I do *not* give creditors more
> information than the notice requires if they call asking questions. I would
> at most maybe send an inquiring creditor a copy of my long-ago-filed
> affidavit to the court listing all the known and ascertainable creditors we
> sent notice to, which has a copy of that notice as exhibit A. Let them
> figure it out from there. (I would be more willing to send that if their
> name/address appeared on it.)
>
>
>
> I could perhaps imagine a fiduciary duty to creditors arising in an
> *insolvent* estate. I would borrow this from (Delaware but maybe now
> more) corporate law, which I believe recognizes duties owed to shareholders
> – and only any level of duty to creditors as the corporation *passes*
> (not even as it approaches) the “zone of insolvency” – i.e., only once the
> entity firmly is insolvent. (I had to dissect the seminal Delaware case *North
> American Catholic Educational Programming v. Gheewalla* (Del. Supr. 2007)
> for a partner back in the day. I gather it’s still good law (
> https://corpgov.law.harvard.edu/2020/04/15/director-fiduciary-duty-in-insolvency/
> ).)
>
>
>
> I just don’t presently see how a trustee/PR owes a *fiduciary* duty to
> creditors of a solvent estate, but I respect that there are surely
> arguments I haven’t considered.
>
>
>
> Best regards, Josh
>
>
>
> Joshua D. McKarcher
>
> McKarcher Law PLLC
>
> 537 6th Street
>
> Clarkston, WA 99403
>
> (509) 758-3345
>
> (509) 758-3314 (fax)
>
> josh at mckarcherlaw.com
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com <
> wsbapt-bounces at lists.wsbarppt.com> *On Behalf Of *Philip N. Jones
> *Sent:* Wednesday, July 15, 2020 4:45 PM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* Re: [WSBAPT] PR Duty to Respond to Potential Creditors?
>
>
>
> First, I apologize because I have not followed this entire thread.
> Perhaps my question has already been answered:  Way down here in Oregon,
> there is very little authority on the issue of whether a PR has a fiduciary
> duty to creditors.  I think there is such a duty.  But little authority
> exists.  Some practitioners think there is no duty.  Perhaps the answer is
> a compromise:  To protect the PR against potential liability to an
> overlooked creditor, the PR should be careful to treat the creditors
> properly.
>
> Any authority in Washington?
>
> Thanks,
>
> Phil Jones
>
> Portland, OR
>
>
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com <
> wsbapt-bounces at lists.wsbarppt.com> *On Behalf Of *Xan Gerson
> *Sent:* Wednesday, July 15, 2020 10:12 AM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* Re: [WSBAPT] PR Duty to Respond to Potential Creditors?
>
>
>
> For what it’s worth, in a guest lecture to the estate planning class I was
> teaching, Comm. Velategui said that you are required to send notice of
> probate to CIR partners.
>
>
>
>
>
> Alexandra (Xan) Gerson
> *Attorney*
>
> 206.408.8163
> xan at metisestateplanning.com
>
>
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com <
> wsbapt-bounces at lists.wsbarppt.com> *On Behalf Of *Nicholas Pleasants
> *Sent:* Tuesday, July 14, 2020 6:43 PM
> *To:* wsbapt at lists.wsbarppt.com
> *Subject:* [WSBAPT] PR Duty to Respond to Potential Creditors?
>
>
>
> Hello fellow probate practitioners,
>
> I have a couple probate hypotheticals for consideration.
>
> First situation: Let’s say a creditor was provided Notice to Creditors,
> the 4-months since publication has passed and the 30-days from delivery to
> creditor has passed. Now creditor sends a letter asking for a copy of the
> Notice to Creditors. I don’t want to restart the RCW 11.40.030 clock,
> giving them another month to respond. Does PR have a duty to respond to
> this potential creditor at all?
>
> Second situation: Let’s say decedent may have been in a meretricious
> relationship. Is the non-spouse partner entitled to any notice of the
> probate? Let’s say non-spouse is not mentioned in the Will at all, not a
> co-owner of decedent’s real property, but possibly there is some tangible
> personal property owned together. How about notice to creditors as a
> potential claimant? Obviously PR does not want to encourage potential
> claimant, and only wants to provide notice as strictly required by statute.
> Also wondering whether non-spouse partner has any right to request special
> notice?
>
> I realize that second situation is a bit trickier, as the interplay
> between Committed Intimate Relationship doctrine and Probate is
> interesting. I am curious from a notice standpoint what responses you might
> advise PR to give in these situations. Thanks in advance for any experience
> you can share.
>
>
>
> Best,
>
> Nick
>
>
>
> *Nicholas Pleasants*
>
> Pleasants Law Firm, P.S.
> 2300 130th Ave NE, Suite A-101
> Bellevue, WA 98005-1755
> (425) 615-7070 tel/fax
> nick at pleasantslaw.com
>
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