[WSBAPT] BECU and Creditor Claim

[Jennifer L White]

Brent, first off, sorry for the loss of your mother ☹
Yep – that’s BECU’s dirty little secret. All those friendly TV ads are just BS (insert grimace face emoji).
Buried DEEP within their account agreements is a cross collateralization provision allowing them to seize anything and everything upon a “default.” And the best part? Death is an act of default! At least that was the case the last time I had this come up and finally pried a copy of the agreement out of them. And, it’s not a prominent provision. It is tucked in something else and the wording made it seem very benign. I don’t think the average person would even take notice.

Practicing in King Co, we all see a lot of generational Boeing families. On the planning side, like Michael said, I let clients know this provision exists and to consider separating their BECU debt from their significant financial resources and taking the wealth somewhere else.

I first had this come up with an estate that was cash poor. The mother had worked for Boeing and maintained a small checking & savings and of course, the obligatory BECU credit card. She then got a HELOC. My client, her son, was a METRO bus driver and his wife a waitress. They were living pay check to pay check and could not afford to pay that extra mortgage until the house got sold.  BECU seized the checking and savings and paid off the minor credit card debt. Despite being over secured on the HELOC by tens of thousands of dollars, they would not let loose of the cash. Fate, however, smiled down on my client. As he was cleaning out her house, he came across a scroddie Efferdent denture soaking box (insert yuck face emoji). He picked it up to throw out, but something inside rattled (and it wasn’t Ma’s false teeth). It was a valuable diamond ring! He was able to sell that ring and keep the estate’s bills paid until the house sold. Never a dull moment in this profession!

Have a great Tuesday!

Jennifer L. White, Esq.
[cid:image001.jpg at 01D9A8E5.E1BDF4C0]

jen at appletreelaw.com<mailto:jen at appletreelaw.com>
2200 S 76th Ave
Yakima, WA 98903
509.225.9813

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Rebecca King
Sent: Tuesday, June 27, 2023 9:36 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] BECU and Creditor Claim

BECU has language in their lending documents that say that BECU can freeze or collect from any accounts at BECU at death.  Credit Unions can do this. I’ve had several estates in which BECU has pulled funds from decedent’s checking/savings accounts, completely circumventing the creditor claim process.

Warmest regards,
Rebecca King
Attorney

Northwest Elder Law Group
2150 N. 107th Street, Suite 501
Seattle, WA 98133
Main: (206) 937-6102
Direct Line and Fax: (206) 866-6544

Providing Services in Elder Law

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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: Tuesday, June 27, 2023 8:50 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] BECU and Creditor Claim

There was one BECU credit card and one checking/savings that is required to have any account at BECU. I am prepared to just leave the under $200 in the checking/savings but I will not be providing any further information for an unsecured credit card where they got the NTC with a cover letter that provided the account number.

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

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

Physical Address: 500 S 336th Street, Suite 214; Federal Way, WA 98003

**EFFECTIVE IMMEDIATELY** All mail sent through the USPS should be sent to the following address: PO BOX 3319; Federal Way, WA 98063

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On Mon, Jun 26, 2023 at 7:16 PM David Moe <davidmoe at maplevalleylaw.com<mailto:davidmoe at maplevalleylaw.com>> wrote:
By any chance is BECU a secured creditor as to the debt in question—and does the estate (incl. non-probate estate) include funds in BECU CD or share or checking accounts?  BECU (and perhaps other credit unions) may claim to have a right to freeze or to enforce a set-off as to decedent's assets in BECU accounts.  I don't believe commercial banks enjoy the same right.   The right of set-off might put BECU in a "secured-creditor" status.  Secured creditor status would allow BECU to ignore the mailed NTC and to verify their offset claim.

Possibly that would explain the BECU  request for letters and death certificate.  This happed with an unfortunate result some year back with one of my probate matters where decedent left a $16K BECU share account but also had a secured debt held by BECU.  I don't recall whether that was a BECU notice/deed of trust or a BECU credit card debt.  The share account was decedent's only liquid asset other than equity in decedent's personal residence real property.  That cient needed some of the cash from the BECU account to make the decedent's residence marketable, in which event both the estate and BECU would have benefitted.  There would have been a modest surplus to the estate.  The PR client (a sole adult child beneficiary) did not have (or did not want to risk) additional personal funds to make the necessary repairs.  BECU would not relent.  My client, who had traveled from the east coast and paid attorney fees to open the probate, decided to abandon the estate rather than sink more personal funds into the fiasco.   In today's real estate market things might have been different.   My take-away has been to warn modest-means clients about this mixed-benefit situation involving credit unions.

Has anyone else experienced this?

Dave Moe

David Moe Attorney, P.S.
Telephone:  425-432-1277
Fax:  425-432-1280
23745 225th Way SE, Suite 108
Maple Valley, WA 98038

Email:  davidmoe at maplevalleylaw.com<mailto:davidmoe at maplevalleylaw.com>

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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 <brent at williams-ruthlaw.com<mailto:brent at williams-ruthlaw.com>>
Sent: Monday, June 26, 2023 5:06 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com<mailto:WSBAPT at lists.wsbarppt.com>>
Subject: [WSBAPT] BECU and Creditor Claim

A funny thing happened on the way to the forum today......

I got a letter from BECU after sending them a known creditor notice for my mother's estate.  Rather than filing a creditor claim, they send me a document stating that I need to send them my letters testamentary and a photocopy of the death certificate.

Has there been some change to the creditor statute? Have I fallen and hit my head?

I cannot recall the total number of creditor's claims filed by BECU in the past - so I am curious as to whether anyone else has received notices like this. It seems strange that they would elect to send this - noncompliant communication - over actually just sending the creditor's claim.

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

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

Physical Address: 500 S 336th Street, Suite 214; Federal Way, WA 98003

**EFFECTIVE IMMEDIATELY** All mail sent through the USPS should be sent to the following address: PO BOX 3319; Federal Way, WA 98063

Office/Scheduling Phone: (253) 285-7751

Direct: (253) 285-7453

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