[WSBAPT] Separate Property Transfer

Tue Jan 5 19:31:37 PST 2021

Hi Amy,
It doesn’t seem like you would be taking away their inheritance. I believe you would file probate, sell the properties, distribute one-half to surviving spouse, and hold back one-fourth for each child. If the children cannot take their inheritance, you can put it in a trust for their benefit (with GAL/Court approval), interplead to the court (some counties like this, some don’t), send to DOR in Olympia as unclaimed property, or hold it in some other type of blocked account situation. Then they can claim the inheritance when they get their act together.
You probably need to dissuade your client that the rentals can be kept as a going concern. If you had agreement from the children, maybe you could come up with an arrangement that worked. Theoretically the mortgages could be assumed by the surviving spouse. But realistically liquidating estate property is the straightforward approach. I think the spousal award under RCW 11.54.010 is probably a red herring in this fact pattern because he is going to get more ($150,000) by just taking his half of the equity in the rental than taking the homestead amount ($125,000). Unless there are good grounds under RCW 11.54.040 for increasing the award, say giving him all of the estate property? I know the courts don’t want surviving spouses to be homeless, so maybe there is an argument for him to get one of the rentals to live in…
Just my two cents.
Best,
Nick
Nicholas Pleasants
Owner

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From: <wsbapt-bounces at lists.wsbarppt.com> on behalf of Amy Goertz <amyjgoertz at icloud.com>
Reply-To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Date: Tuesday, January 5, 2021 at 12:34 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Separate Property Transfer

Good morning -

I had a call from a potential client whose spouse (age 49) recently passed away.

Here are the facts:

1. Couple begin living together and sharing finances in 2015.
2. Residence belongs to spouse’s parents; couple pay taxes, expenses/upkeep but no rent. Not sure if they will continue to allow him to live there.
3. Couple married in August 2019.
4. Spouse owned two rental properties before 2015. Each is worth approximately $200k, and each has outstanding mortgage of approximately $50k.
5. Both rental properties are in spouse’s name only. Potential client claims he made the mortgage payments for past five years (although there are renters, so not sure how accurate this is.)
6. Spouse has two adult children. One is in prison (for murder) and the other is currently unemployed and possibly on public assistance.
7. Spouse died in November without a Will or other formal planning.

Potential client (age 60) asked me how to go about transferring two rental properties into his name.

Per RCW 11.04.015, the surviving spouse is entitled to all community property and one-half of the separate property.

Since the properties were his wife’s prior to marriage and she died with no estate planning, he is entitled to one-half of these separate property rentals.

Do you have any insight or tips for how to best to approach this? My initial thought would be to start probate and request a spousal/homestead award from her separate estate. Client says the children would have no ability to manage or maintain the properties. Not sure when the one in prison may be released - he was 19 when convicted of murder in 2006 and has served 14 years of a 20-year sentence. I certainly have reservations about sending him Notices with my name on them and having the perception be that I am taking away his inheritance.

What are your thoughts?

Amy J. Goertz, J.D.
Goertz & Lambrecht PLLC
amyjgoertz at icloud.com<mailto:amyjgoertz at icloud.com>

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1.877.684.1627 fax
Address for correspondence:
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Spokane, WA 99203

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Goertz & Lambrecht PLLC
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