[WSBAPT] Claiming small estate by affidavit as custodian for minor grandchild as sole heir and successor to decedent

[Eric Nelsen]

Josh—I just spent 45 minutes reading and re-reading the statutes, and I think I ended up recapitulating some of the research you must have already done. I don’t think that the small estate affidavit can be signed by a grandparent. The minor is the only person who qualifies as a “successor” under RCW 11.62.005(2)<https://app.leg.wa.gov/RCW/default.aspx?cite=11.62&full=true#11.62.005>, and the definition can’t be stretched to include anyone else, except a person with already-legally-confirmed authority to receive the minor’s property. I think.

I don’t think you can bootstrap a UTMA custodian by having an obligor say “I’m designating this grandparent as UTMA custodian of the property I owe to the minor” and at the same time “I as obligor can accept this small-estate affidavit from the grandparent because they’re a UTMA custodian for the property I owe to the minor.” The logic is circular: each act is the precedent for the other, so neither of them can logically occur first without the other having occurred before it.

In any event, even if it worked in theory, I bet the life insurance company will want a court order of some kind. Even if the heir’s mother applied to them for the funds—she is the natural guardian—in my experience life insurance companies require commencement of a minor guardianship. I’ve never had an insurance company accept a UTMA designation, even for a $25,000 policy split between two minors.

Hypothetically I think that an insurance company could designate a UTMA custodian under RCW 11.114.070(3)<https://app.leg.wa.gov/RCW/default.aspx?cite=11.114&full=true#11.114.060> if the amount going to the minor is less than $30,000. But I doubt the company would take on the risk designating a UTMA custodian themselves, even if the statute allows it. Easier and less risky for them to force the family to pay the expense of a guardianship.

As for the car and the cash, I think it’s the same issue for whomever has possession of those assets. How do they obtain the protection from liability under the small estate affidavit process? Only by having the successor sign the affidavit—but the only proper successor is the minor or a legally designated representative. Does the mother’s natural guardian status include that authority? I don’t think it does, though I haven’t researched it.

I think you are correct, that this one of those things that “works if the obligor allows it to work and hands over the asset” but “doesn’t work and you have zero leverage if the obligor declines.” A bare-bones minor guardianship might be simplest. I think that’s more streamlined now under the new statutes?

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>

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Joshua McKarcher
Sent: Wednesday, November 23, 2022 12:52 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Claiming small estate by affidavit as custodian for minor grandchild as sole heir and successor to decedent

I would be grateful for your knowledge if you know whether a qualified custodian under our state’s UTMA can permissibly collect a decedent’s personal property by a small estate affidavit as “successor” on behalf of the decedent’s sole heir, a minor child.

My clients’ adult son died, leaving no surviving spouse, one 11-year-old son, and individual items of personal property. Each item is worth less than $30,000, and all items together are worth less than $100,000 collectively.

Clients get along very well with minor grandchild and his surviving mother (who was never married to the decedent, to be clear).

I have very little experience with small estate affidavits and custodianships, but I believed (hoped?) these grandparents (or one of them) could sign a small estate affidavit as the decedent’s parents (having priority of appointment as PR) and as qualified custodians for their grandchild under Washington’s UTMA. I intended to have them open a custodial bank account at the same bank holding decedent’s funds (where they bank as well), and to deposit the proceeds of life insurance, a car, and a small amount of cash into the custodial account. Voila! (Rather, voila?)

If I am reading UTMA correctly, I “think” each obligor can, without court appointment of the grandparent, turn over each individual asset to the grandparents as custodians so long as each is under $30,000 in value . . . if they can also sign a small estate affidavit on behalf of the minor child “successor.”

So, I “think” the relevant issue is: is it permissible to modify the small estate affidavit so that the grandparent is signing it as custodian for the minor child as sole heir and successor to decedent and only with respect to individual assets not exceeding $30,000 in value?

Or is this one of those things that “works if the obligor allows it to work and hands over the asset” but “doesn’t work and you have zero leverage if the obligor declines”?

Have I happened upon a fact pattern that requires court appointment of the grandparent as Administrator of the decedent’s intestate estate, despite the seeming necessity or justification for incurring that cost?

Happy Thanksgiving? 😉 (No, really: Happy Thanksgiving!!)

Thanks, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.com>




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