[WSBAPT] Transfer of Interests in Real Property

Tue May 30 13:45:59 PDT 2023

Here is my take since I just researched this very issue to provide in a letter to the PR's attorney:

  *   The real estate vests in those to inherit at death.  This includes rents collected after death as part of the package deal and those are to the heirs as well subject to RCW 11.04.250.
  *   Given the statute, the PR/Administrator needs to handle debts, creditors and creditor claims, and subject to the Will contest period and expectation of any homestead claims.

Real Property.  The real property vested in the three sons as of date of death of decedent.  See RCW 11.04.250 cited below.  This vesting should have been followed up with the PR Deed and Real Estate Excise Tax Affidavit being recorded once the Will contest period ended.  It has become known to decedent's sons that the widow PR has been collecting rent/profits on these commercial properties apparently to support her personal lifestyle and that she has removed a park model rental unit, along with equipment and tools as her own.  This self-serving behavior by the PR needs to stop and those items belonging to the real estate need to be returned immediately with an accounting of rents/profits since death.  The Will provides that the widow receives the residual of decedent's Estate after distribution of the real property to decedent's three sons.  If there is any known debt or creditor's claims pending, please provide this information to me in addition to the date of death and current mortgage statements showing payments on the two real properties.

Rental Income and Commercial Real Estate.  As indicated above, the PR widow has been collecting rents/profits from the real properties since date of death, and those monies need to be accounted for on behalf of my clients.  There are 13 total rentals on the properties along with tenants enjoying a shop, equipment, tools and buildings as part of their leases.  Management and maintenance of these commercial properties is imperative to maintaining relationships with the tenants, and the PR's actions in removing rental modular units and equipment/tools which were bolted down, is a violation of her fiduciary duties to the Estate and my clients as heirs.

RCW 11.04.250. When real estate vests--Rights of heirs Currentness.

When a person dies seized of lands, tenements or hereditaments, or any right thereto or entitled to any interest therein in fee or for the life of another, his or her title shall vest immediately in his or her heirs or devisees, subject to his or her debts, family allowance, expenses of administration, and any other charges for which such real estate is liable under existing laws. No administration of the estate of such decedent, and no decree of distribution or other finding or order of any court shall be necessary in any case to vest such title in the heirs or devisees, but the same shall vest in the heirs or devisees instantly upon the death of such decedent: PROVIDED, That no person shall be deemed a devisee until the will has been probated. The title and right to possession of such lands, tenements, or hereditaments so vested in such heirs or devisees, together with the rents, issues, and profits thereof, shall be good and valid against all persons claiming adversely to the claims of any such heirs, or devisees, excepting only the personal representative when appointed, and persons lawfully claiming under such personal representative; and any one or more of such heirs or devisees, or their grantees, jointly or severally, may sue for and recover their respective shares or interests in any such lands, tenements, or hereditaments and the rents, issues, and profits thereof, whether letters testamentary or of administration be granted or not, from any person except the personal representative and those lawfully claiming under such personal representative.  Wash. Rev. Code Ann. § 11.04.250 (West).

In this Estate, the Will has been probated and the date for a Will Contest has passed.  The Henderson court cited herein further clarified the above statute in its decision:  "We construe RCW 11.04.250 [cf. Rem.Rev.Stat. § 1366] to mean that real property and the right to receive the income therefrom vest in the devisee as of the date of the death of the decedent, subject only to the trusteeship of the executor during the probate of the estate."  In re Henderson's Est., 46 Wash. 2d 401, 403, 281 P.2d 857, 859 (1955).  Therefore, the real property vested in decedent's three sons at the time of his death.  The formality of preparing and recording deeds should have been accomplished by the PR as it is now nearly 5 months since date of death.  There are no creditor claims filed in the Estate and the Will Contest period ended four months after the Will was admitted to probate on January 11, 2023.  No Will Contest has been filed on or before May 11, 2023.  There are no known creditor claims or other debts besides the mortgages on the real properties.  When a person dies seized of lands, tenements or hereditaments, or any right thereto or entitled to any interest therein in fee or for the life of another, his title shall vest immediately in his heirs or devisees, subject to his debts, family allowance, expenses of administration and any other charges for which such real estate is liable under existing laws.  Matter of Est. of Niehenke, 117 Wash. 2d 631, 644, 818 P.2d 1324, 1331 (1991).

Dalynne Singleton
Gourley Law Group
Snohomish Escrow
The Exchange Connection
1002 10th Street / PO Box 1091
Snohomish, WA 98291
360.568.5065
360.568.8092  fax
dalynne at glgmail.com<mailto:dalynne at glgmail.com>
Website:  www.glglawgroup.com<http://www.glglawgroup.com/>
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Eric Nelsen
Sent: Tuesday, May 30, 2023 1:18 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Transfer of Interests in Real Property

The statute is clear that the property vests in the heirs, subject to estate claims/debts; it does not say that property vests in the estate, to be later transferred to heirs. If it said the latter, then appointment of a PR and execution of a deed to transfer would be essential. But because it says the former, no deed is needed; just a court order determining who the heirs/devisees are and confirming ownership, rather than conveying ownership.

When I get title commitments on estate properties, the commitment typically shows vesting in "heirs and devisees of XX, deceased," which I think is technically correct: the title company agrees that 11.04.250 vests the property in the heirs, but they're not specifically named because there has not yet been any formal adjudication determining who the heirs or devisees are.

I do think that title companies are willing to take the risk, and insure title in a specific person, if they receive an affidavit of lack of probate and all the other circumstances are right. For example, when insuring title in a surviving spouse when more than 2 years have passed since the first spouse died.

I wouldn't say that title transfers at death to "the estate" though that's certainly a practical way to look at it, since any inheritance by heirs and devisees is necessarily subject to estate expenses, etc. Nevertheless, I don't think that an "estate" is an entity that can hold title to real property in the technical sense of title ownership. While a probate is pending, it's technically owned by heirs and devisees, but that ownership is moot as a practical matter compared to the PR's authority to pay debts, sell assets, etc. The PR's authority against the heirs' ownership is so strong it can result in complete divestment. Bickford v. Stewart, 55 Wash. 278, 286, 104 P. 263 (1909). Only after an estate is closed can an heir treat inheritance property as their own. In re Peterson's Estate, 12 Wn.2d 686, 734, 123 P.2d 733 (1942).

Put another way: It's a question of separation between ownership and control. After a title owner has died, the identity of the new title owner is unknown until there is an adjudication of heirs/devisees. Control over the property also resides in the heirs/devisees (with the caveat that no one can know for sure if they are actually an heir until an adjudication occurs); but the control over the property switches to the PR if one is appointed.

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>

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 Mark Anderson
Sent: Tuesday, May 30, 2023 12:25 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Transfer of Interests in Real Property

With respect to inheritance, I always understood that title to the property automatically transferred by operation of law to the estate of the decedent, and not directly to any of the heirs, whoever they may be.  To transfer title to the property that estate to any of the heirs (or to anyone else for that matter), a deed from a personal representative or administrator would seem appropriate.

I've seen on more than one occasion where a title company shows vesting in some distant ancestor or that ancestor's estate.  I don't think a lack of probate affidavit can cure that break in title.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.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 Eric Nelsen
Sent: 05/30/2023 11:36 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Transfer of Interests in Real Property

I think the rationalization is that "conveyance" means a voluntary act, and does not apply to transfers of real estate by court action or operation of law.

No deed is required to transfer ownership of real property in a divorce, for example-the judgment alone is sufficient. See, e.g., In re Marriage of Kowalewski, 163 Wn.2d 542, 548, 182 P.3d 426 (2008), citing see United Benefit Life Ins. Co. v. Price, 46 Wn.2d 587, 283 P.2d 119 (1955), overruled on other grounds by Aetna Life Ins. Co. v. Wadsworth, 102 Wn.2d 652, 689 P.2d 46 (1984).

Also recall the underlying doctrine in adverse possession-that 10 years of exclusive, continuous, hostile, open & notorious possession is enough to actually transfer ownership, and the court's judgment later on merely confirms the transfer that occurred back when the 10-year requirement was met.

Same thing with inheritance, I think. The fundamental rules about real estate in our legal system is that it's always owned by somebody. So inheritance is instant upon death (in theory anyway since the simultaneous death act, Ch. 11.05A RCW, leaves a 120-hour window in which the instant vesting can be retroactively deemed not to have happened).

The issue I think Mark's driving at is, how does one find out that the owner listed in the public record has died and somebody else now owns the property. As with adverse possession, I think it won't show up in a title search until somebody takes formal action confirming the transfer that already happened by operation of law at the time of death. That is most often done via a probate with the PR executing a deed, but it could also occur without a deed by the Court entering a Decree of Distribution. Alternatively, an adjudication of testacy or intestacy under RCW 11.28.340, without appointment of a PR, is also effective as a Decree of Distribution.

So the fact of the inheritance won't show in a title company's search until there is some kind of formal action to put either a Decree or a deed into the public record. If the probate doesn't happen for years, then a title search won't reveal the anomaly for that entire time: even though ownership has actually passed by inheritance, there is nothing in the record confirming it. Same problem with adverse possession, really: there could be an existing adverse possession of part of the property, and there's no way to tell from the title documents, until the possessor get a judgment quieting title.

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>

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: Tuesday, May 30, 2023 10:25 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Transfer of Interests in Real Property

I share Mark's curiosity.  Down here in Oregon, we have a similar statute.  I have never understood what effect it has.
Perhaps it is similar to the early vesting rule we have down here, which provides that assets in a trust or estate vests at the earliest possible moment, usually at the death of the testator (or trustor) unless the document states otherwise.  So if I die, my assets vest in my kids, even if one of them dies the next day, unless my will states otherwise.  But my estate still needs to go through probate for formal title to pass by a PR's deed.
Does anyone have a different take on that statute?
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<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Mark Anderson
Sent: Tuesday, May 30, 2023 10:13 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Transfer of Interests in Real Property

Dear Listmates:

It has oft been said (indeed it is said below) that "real property, its rights and burdens, vest in the devisee at death, subject only to claims against the estate."

How, then, does this premise circumvent or supersede the requirements of RCW 64.04.010 that conveyances and encumbrances are to be by deed?  I acknowledge the "PROVIDED" language in that statute, but I am not clear on the mechanics involved.

And how would you expect a title search to reveal such a transfer?

In advance, thanks for your input.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
CONFIDENTIALITY NOTICE
This transmission is confidential and is intended solely for the use of the individual named recipient. It may be protected by the attorney-client privilege, work product doctrine, or other confidentiality protection. If you are not the intended recipient, or the person responsible to deliver it to the intended recipient, be advised that any dissemination, distribution, or copying of this communication is prohibited. If you have received this transmission in error, please immediately notify the sender via e-mail or by telephone at (253) 327-1750 that you have received the message in error, and then delete it. Thank you.
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