[WSBAPT] Can Creditors Access Assets Placed into a Revocable Living Trust after the settlor's Death

[Roger Hawkes]

Agreed; I routinely do the four month notice and think of that four months as the sol; of course there is also a two year sol for folks who are not otherwise 'sol shortened'.

Roger Hawkes, WSBA # 5173
Shoreline Office: 19944 Ballinger Way NE
                                Shoreline, WA 98155
Sultan Office:        423 Main
                                 Sultan, WA 98294

Phone: 206 367 5000; fax: 206 367 4005
Email: roger at law-hawks.com<mailto:roger at law-hawks.com>
Web site: www.hawkeslawfirm<http://www.hawkeslawfirm/>.com
.

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Marcus Fry
Sent: Tuesday, July 21, 2020 2:44 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Can Creditors Access Assets Placed into a Revocable Living Trust after the settlor's Death

Roger:
It appears that Michael's questions pertained to a revocable living trust (now irrevocable as settlor died) receiving assets via non probate beneficiary designations made by the settlor.  I was unclear how placing was occurring, such as via a pour over will.

As to shortening the creditor period, one can utilize the nonprobate notice to creditors to shorten to 4 months from the 2-year period of creditors to pursue claims against an estate and/or a trust possessing or receiving assets of settlor.  Just need to publish and give actual notice to known creditors.

Lastly, I agree with the exchange that was subsequently had that some particular assets, such as life insurance and retirement accounts, could have creditor protection from decedent/settlor's creditors.  However, if in fact these types of assets were distributed directly to the RLT for general trust administration as opposed to a subtrust in the RLT, that is likely lost.

Regards,

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Roger Hawkes
Sent: Tuesday, July 21, 2020 1:54 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Can Creditors Access Assets Placed into a Revocable Living Trust after the settlor's Death

??? shortened via publication??? How and why would that happen?

Roger Hawkes, WSBA # 5173
Shoreline Office: 19944 Ballinger Way NE
                                Shoreline, WA 98155
Sultan Office:        423 Main
                                 Sultan, WA 98294

Phone: 206 367 5000; fax: 206 367 4005
Email: roger at law-hawks.com<mailto:roger at law-hawks.com>
Web site: www.hawkeslawfirm<http://www.hawkeslawfirm/>.com
.

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 Marcus Fry
Sent: Monday, July 20, 2020 4:14 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Can Creditors Access Assets Placed into a Revocable Living Trust after the settlor's Death

Michael:
Your question is confusing.  An estate cannot create a revocable living trust.  If your question involves a scenario where settlor established a revocable living trust, but died leaving some assets outside of the trust, and the will poured over into the trust, those assets would be subject to the settlor's creditors for up to 2 years, which would be no different if all of the assets of the settlor were in the trust prior to death.  Still 2 year period for unsecured creditors under RCW 11.40 unless shortened via publication.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
P.O. Box 1689
Yakima, Washington  98907
Telephone:  (509) 248-7220
Facsimile:  (509) 575-1883

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of msafren at jennylinglaw.com<mailto:msafren at jennylinglaw.com>
Sent: Monday, July 20, 2020 4:03 PM
To: 'WSBA Probate & Trust Listserv'
Subject: [WSBAPT] Can Creditors Access Assets Placed into a Revocable Living Trust after the settlor's Death

Hello Learned Listservers,

I had a question for you all regarding creditor's ability to access assets that were placed into a revocable living trust after the settlor's death.  I'm unclear if the creditor has such an ability and if so the extent of the creditor's ability to force the sale of assets transferred into the trust to satisfy the creditor's claims.

To be clear, these are not secured creditors, but rather potential unsecured creditors and assume that creditors file their claims timely.

I could find nothing clearly answering this question one way or the other.  RCW 19.36.020 states "That all deeds of gift, all conveyances, and all transfers or assignments, verbal or written, of goods, chattels or things in action, made in trust for the use of the person making the same, shall be void as against the existing or subsequent creditors of such person."  However, once a settlor dies and successor beneficiary and successor trustee appears, I imagine that RCW 19.36.020 would not longer apply.

I've got a client and this question is of great concern to my client. Please let me know your thoughts and the reasons for your opinions.

Warmest regards,

Michael S. Safren, Esq.
Attorney at Law

14900 Interurban Ave. S., Ste. 280 | Seattle, WA 98168
11900 NE 1st St., Bldg. G - Ste. 300 |  Bellevue, WA 98005
P: (206) 859-5098 | E: msafren at jennylinglaw.com<mailto:msafren at jennylinglaw.com>
www.jennylinglaw.com<http://www.jennylinglaw.com> | facebook.com/jennylinglaw/<http://www.facebook.com/jennylinglaw/>


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