[WSBAPT] Transfer right before death

Wed Mar 23 07:53:03 PDT 2022

This is a really interesting topic, and I’ve had to counsel clients *not* to do this.  I also used fraudulent transfer as one of my causes of action in a civil case several years ago.  It succeeded.  WA does not take such transfers lightly.

Just for the purpose of CYA; what is the best way to cover ourselves if our clients come to us with a plan such as Brent described?  If it happens to me, I add to my case notes that I advised the client not to do this, and I believe I also follow up with at least one email to the client with that recommendation.  Is that enough, or should I do more to cover myself?

Thanks,
Candace Wilkerson

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Russell D. Garrett
Sent: Monday, March 21, 2022 8:17 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Transfer right before death

Brent

I did appreciate that you didn’t suggest the action.  I apologize for any suggestion otherwise.   I offered it gratuitously because its one of those things that we see after the fact and the lawyers who have been involved in the advice process don’t always document their advice NOT to take such action and end up getting caught up in the process.

I had a case several years ago in which the impact of the estate planning was to transfer assets to trusts for the benefit of adult children.  When the transferor filed bankruptcy several years later, the transfers, after some research, became apparent.

Russell D. Garrett  |  Attorney

OR Direct: (503) 598-5519

WA Direct: (360) 567-3911

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Portland Metro  |  Bend  |  Vancouver WA

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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 Brent Williams-Ruth
Sent: Monday, March 21, 2022 4:44 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Transfer right before death

Thank you all!

To be clear - I did not recommend this strategy. This is what came to me for handling AFTER the fact. Adviser was one of a financial variety.

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

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

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On Mon, Mar 21, 2022 at 4:24 PM Russell D. Garrett <Russell.Garrett at jordanramis.com<mailto:Russell.Garrett at jordanramis.com>> wrote:
Philip, not bad for  “lowly estate planner”!!    Lawyers who counsel or assist their clients to make fraudulent transfers may themselves be subject to more than just discipline.

Russell D. Garrett  |  Attorney

OR Direct: (503) 598-5519

WA Direct: (360) 567-3911

jordanramis.com<https://url.emailprotection.link/?btnJItAjOAjaiitGfFUw1C7cSUnt59oA7qhSL-NMoLjHocmWI5nC20F8uciZPSctXYhs_AQtL0SWfvfzRxoMJIg~~>  |  (888) 598-7070

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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 Philip N. Jones
Sent: Monday, March 21, 2022 3:57 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Transfer right before death

I am not a creditor’s rights attorney.  But even a lowly estate planner like me thinks this looks like a fraudulent transfer.  See RCW 19.40, known as the Uniform Fraudulent Transfer Act, also known as the Uniform Voidable Transactions Act.  This is the state law that the IRS uses when someone (or some entity) transfers assets at a time when taxes are due, thus creating insolvency and preventing the IRS from collecting their taxes.  But any creditor can use this statute if the facts are right.  The recipients of the assets are subject to something known as transferee liability.  Best thing to do is talk to a creditor’s rights attorney ASAP, and do not rely on my amateurish opinions.
Phil Jones

Philip N. Jones
Duffy Kekel LLP
900 S.W. Fifth Ave. Suite 2500
Portland, OR 97204
pjones at duffykekel.com<mailto:pjones at duffykekel.com>
(503) 226-1371 – office
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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 Brent Williams-Ruth
Sent: Monday, March 21, 2022 3:43 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Transfer right before death

Decedent sees the end coming. Transfers all assets to their sibling.

Decedent passes with $XXX in debt.

Is the estate insolvent where the creditors are “out of luck” or is this a transfer that can be undone.

Key in my mind is that there is literally not a single asset that will be conveyed after death.

Brent Williams-Ruth
Attorney-At-Law

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

Office/Scheduling Phone: (253) 285-7751

Direct Mobile: (253) 285-7453

500 S. 336th St., Suite 214; Federal Way, WA 98003

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