[WSBAPT] Living Trust issue

Tue Apr 18 09:02:53 PDT 2023

I actually used to be able to have clients endorse checks to my IOLTA account, and more than once used this for small dollar checks payable to an estate long closed, or with a client we may have already assisted with a SEA. Recently, my bank has refused to deposit any checks payable to clients, even if endorsed by that client. They are categorizing them as 3rd party checks. Efforts to explain that all funds in our IOLTA are 3rd party funds have been unsuccessful in changing their minds.

Heather

Heather S. de Vrieze
Attorney-at-Law
[cid:image001.jpg at 01D971D2.7C2A5440]
3909 California Avenue SW
Seattle, WA 98116-3705
(206)938-5500
heatherd at westseattlelaw.com<mailto:heatherd at westseattlelaw.com>
www.westseattlelaw.com<http://www.westseattlelaw.com/>
Click here to connect with de Vrieze | Carney on Facebook:   [FB Logo] <https://www.facebook.com/DeVriezeCarney>
For your advance planning - I will be away from the office April 26-28.
CONFIDENTIAL & PRIVILEGED. This e-mail message may contain legally privileged and/or confidential information.  If you have received this e-mail in error, please notify the sender immediately and delete all copies of this e-mail message and any attachment.

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Joshua McKarcher
Sent: Monday, April 17, 2023 9:13 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Living Trust issue

Thanks so much, Bruce. I am going to investigate this more closely and will report back. I connected these dots years ago, but I cannot put it all together right now. I know for sure that I would be liable for any deposit that went wrong in my IOLTA account, and my banker knows that as well as I do. As I should be.

What matters in the moment is that my approach is that the lawyer and client are taking responsibility for the proper receipt and application of every penny of such a deposit; that it's in "simple, clear, black and white" cases (such as this only child without disinherited heirs who have never received notice of the will's existence, say, and could challenge application of the funds, say); where I have confidence the money does properly belong to my client (or, I suppose one might say, is, at worst, third-party property subject to no dispute and subject to straightforward delivery to my client in some capacity, including for distribution to beneficiaries to whom s/he owes a fiduciary duty); and where dollar amounts simply do not justify spending legal fees to wrangle a replacement check from some of the most difficult payors on the planet.

Anyhow, I love it - thanks for engaging the discussion. I'll report back, and am always happy to be wrong, because then I can fix it and help others to avoid the same "wrong."

Best, 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/>

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 Bruce Moen
Sent: Monday, April 17, 2023 7:21 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Living Trust issue

Hi Josh,

And I don't really know the answer to all of this or what the Bar may think.

To my mind, an estate  or a trust is not an entity like an LLC or a corporation. An estate or a trust, to my mind, is a relationship and a representative capacity.  To me, the estate exists only via the appointment of a PR or a legislative work around like a Small Estate Affidavit.   Maybe I'm overly cautious, but I declined to use my IOLTA account thusly.  I succeeded in getting the check reissued.

  Bruce

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 Joshua McKarcher
Sent: Monday, April 17, 2023 6:47 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Living Trust issue

Well, this is interesting. I don't think an estate does not exist. I think it is created immediately upon the death of a person and consists of all their property not held (in this example) in trust. Reimbursements owed to the individual decedent are property of the decedent's estate. Whether that estate is administered or resolved by a small estate affidavit (note word "estate"), or by a court process, there is an estate. The check is made payable to the estate, and I would defend this approach to the Bar without hesitation - UNLESS there is a missing fact, such as this child is NOT the only heir and there are disinherited heirs at law, say. But in absence of that - on these easy ones - if I'm representing the one person responsible for resolving the decedent's estate, then I just cannot imagine why the Bar would object to resolving so easily the joint interests of all parties involved, including the payor. Best, Josh

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 Bruce Moen
Sent: Monday, April 17, 2023 6:22 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Living Trust issue

I'm not sure about the IOLTA deposit.
The bank may accept the deposit, but would the Bar Association approve if audited.
Basically, you are negotiating a check to a non-existent payee.

I've had this issue and declined the IOLTA option for a payee that I know does not exist.

No harm, no foul?  Or a violation?

Does anyone know whether the Bar would approve?

  Bruce Moen

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 Joshua McKarcher
Sent: Monday, April 17, 2023 5:58 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Living Trust issue

If you represent the estate - which exists whether it is being administered in court or not - by representing its PR, as I suspect you do, then you can deposit the check to your IOLTA account, let it go collected, and credit it to her next bill or write her a check. Voila!

Alternatively, she can persuade her own bank that she is the only beneficiary of the estate via the trust, and maybe they will negotiate it for her if they know her well.

Or if there is a trust account, she can try to persuade the bank holding the trust account that the trust is entitled to all property of the estate by virtue of the will.

I solve these problems with bank relationships, in the end. It's the easiest and sometimes only option available.

Good luck! Best, Josh

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 Jenna Brozik
Sent: Monday, April 17, 2023 5:30 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Living Trust issue

Hello list mates,

Client's mother passed away and the mother had a living trust.  Client is the Trustee of the Living Trust and only beneficiary.  All assets were titled in the Living Trust. However, client received a check in the mail after mother passed away.  Apparently the mother overpaid her healthcare premium and the company issued her a check for the overpayment.  The check is made out to the Estate.  Client called to ask company to make it out to Living Trust.  Company has refused. Company has refused to reissue the check under any name.

Should client just open up a bank account under the Estate to get this check deposited?  No probate is necessary in this case.  Any suggestions would be appreciated.

Jenna Brozik
Managing Attorney
PRINZ & BROZIK PLLC
445 S. Grand Avenue
Pullman, WA 99163
509-338-0908 Telephone
509-338-3527 Facsimile

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20230418/4b00e9d6/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 17884 bytes
Desc: image001.jpg
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20230418/4b00e9d6/image001.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.png
Type: image/png
Size: 18009 bytes
Desc: image002.png
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20230418/4b00e9d6/image002.png>