[WSBAPT] DOR Tax Warrants on Beneficiary of Estate with Real Estate Assets Only

[Martin]

I agree and I think the rev agent is pressing because he/she is really
limited to levy on the beneficiary's interest. They are treated as judgment
creditors for seizure matters except in a  few instances.  Whatever you
distribute to the bene either satisfies the lien or only  partially
satisfies and DOR can keep its lien on the beneficiary's interest if it
feels you are not doing a bona fide 3rd party sale so that it gets bona fide
1/2 (or whatever) value of the property net of costs of sale and other
allowable payments.  But the remedy of the state is to only allow keep the
lien in place as only partially satisfied.

 

From: wsbapt-bounces at lists.wsbarppt.com On Behalf Of Eric Nelsen
Sent: Monday, March 16, 2020 9:54 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] DOR Tax Warrants on Beneficiary of Estate with Real
Estate Assets Only

 

That doesn't sound right. Unless DOR has an actual argument that it somehow
has a direct interest in the real estate-meaning, it actually owns a title
interest, not just having a lien for monetary reimbursement-I don't see how
DOR can require transfer of a specific asset.

 

There is also a difference between DOR having a lien on the real property,
versus DOR having a lien on A's interest in the Estate. A's interest in the
Estate is inchoate, is subject to the Estate's need to pay creditors and
administrative expenses, and does not involve a right to receive any
specific asset. So even if DOR has a lien against A's interest in the
Estate, that would not give it authority to tell the PR what to do with the
real property, or in what form to distribute A's interest.

 

Maybe DOR wants to argue that the heirs inherited the real property
automatically under RCW 11.04.250
<https://app.leg.wa.gov/RCW/default.aspx?cite=11.04.250> , and so it has a
lien directly on the real property. But even that wouldn't work for them,
because that statute specifically says that an heir's right to real property
is subordinate to the rights of "the personal representative when appointed,
and persons lawfully claiming under such personal representative."

 

I would want to see the specific statutory authority that DOR is relying on
to assert a right to receive real property in satisfaction of its lien.

 

Sincerely,

 

Eric

 

Eric C. Nelsen

Sayre Law Offices, PLLC

1417 31st Ave South

Seattle WA 98144-3909

206-625-0092

eric at sayrelawoffices.com <mailto:eric at sayrelawoffices.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 Natalie Kuehler
Sent: Sunday, March 15, 2020 3:15 PM
To: wsbapt at lists.wsbarppt.com <mailto:wsbapt at lists.wsbarppt.com> 
Subject: [WSBAPT] DOR Tax Warrants on Beneficiary of Estate with Real Estate
Assets Only

 

Hello all,

 

I have an estate with substantial real estate holdings but nothing else in
the way of assets. There are two residual estate beneficiaries, A and B. A
has outstanding tax warrants that are a little less than the value of A's
interest in the residual estate. DOR has filed a notice of tax lien on A's
interest in the estate assets. DOR is now telling me that the personal
representative has to distribute real estate valued in the amount of DOR's
tax warrants directly to DOR. 

 

Has anybody else ever dealt with this? I can't quite believe that the PR
actually needs to distribute real estate to DOR. It would make much more
sense to either (i) require the PR to sell A's share of the real estate and
satisfy B's tax warrants (and DOR's tax lien on the estate assets) from that
real estate sale before distributing the remaining property or sales
proceeds to A; or (ii) require the PR to distribute the real estate to A
subject to a lien by DOR.

 

A is apparently trying to negotiate a settlement with DOR; we have no idea
whether that will be successful however. A is also not interested in
disclaiming at this point.

 

Any advice would be greatly appreciated!

 

Many thanks,

Natalie

 



 

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