[WSBAPT] third party 'advance'

[Philip N. Jones]

Very interesting situation.  I have never had such a situation, but I have heard occasional comments from those who have.
Despite my ignorance, I do have a few comments/questions:
I assume the vendor is requiring the heir to suffer a deep discount in order to gain an acceleration of the (reduced) inheritance.  I assume you will see a copy of an assignment, but I also assume that the price being charged will not be disclosed.  The price will be in a separate confidential document.  At least that is my guess.
Is there a will, or is this intestacy?  If it is a will, does it have a spendthrift clause that might interfere with this arrangement?  All of the trusts I draft, and all of the wills I draft, have spendthrift clauses.  At least last time I looked.
I would guess that the vendor is very familiar with spendthrift clauses.  And I would guess that they have legal counsel who is adept at getting around spendthrift clauses.  Or perhaps they avoid estates that have spendthrift clauses?
I once had a trust where a beneficiary went through bankruptcy, and an "investor" back east purchased the interest of the beneficiary from the bankrupt estate.  I did not think the purchase was valid, due to the spendthrift clause, but the investor was very aggressive and another family member ended up buying out the investor just to get rid of him.  The investor appeared to be in the business of such purchases.  And I am somewhat certain that the vendor in this case is in that exact business and knows how to be aggressive.
Again, this is based on very little real knowledge.  I hope someone with some serious experience will enlighten us all.
Or maybe I should go into this business after I retire . . . . but maybe I need to learn a little bit more about it.
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
(503) 853-1482 - cell
(503) 226-3574 - fax

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Roger Hawkes
Sent: Wednesday, August 16, 2023 2:35 PM
To: Probate and Trust Listserve <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] third party 'advance'

An heir in one of our probates has requested an advance of part of his inheritance by soliciting same from a third party vendor who would get repaid when the inheritance is distributed.  What perils and pitfalls should we be considering?

Roger Hawkes, WSBA # 5173
Sky Valley Lawyers, PLLC
Physical Address: 423 Main Street
Mailing Address:   Box 351
Both in Sultan, WA 98294
Phone 360 799 6438
Email: roger at skyvalleylawyers.com<mailto:roger at skyvalleylawyers.com>

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