[WSBAPT] Liens on estate and real property

Tue Jan 28 17:47:48 PST 2025

  1.
Yes, solvency is a requirement to getting nonintervention powers. RCW 11.68.011(2). http://app.leg.wa.gov/RCW/default.aspx?cite=11.68.011
  2.
Yes, PR can take compensation. It is a cost of administration that has priority ahead of most creditors. RCW 11.76.110. https://app.leg.wa.gov/RCW/default.aspx?cite=11.76&full=true#11.76.110
  3.
Yes, the commission is part of the Purchase & Sale Agreement, essentially a cost of sale. But be careful because you will probably need to follow the procedures in Ch. 11.56 RCW, particularly the sale price (at least 90% of appraised value) and court confirmation (within 10 days of mutual acceptance, publish notice 10-days in advance and have a hearing to approve the sale). https://app.leg.wa.gov/rcw/default.aspx?cite=11.56&full=true
  4.
Theoretically no, but given that it is intervention, see my answer to #3. And I would definitely involve the creditors including DSHS in the sale, and they will usually be flexible on their payoff amount to allow a sale to happen.

That said, these are a ton of work, and you might get challenged on your fees. I would tread carefully.
Best,
Nick

Nicholas Pleasants | Shareholder

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Timothy Lehr <timothy at stileslaw.com>
Sent: Tuesday, January 28, 2025 2:23 PM
To: wsbapt at lists.wsbarppt.com <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Liens on estate and real property

All,

PC is sole heir of mom’s estate – no Will, intestate probate. Only estate assets is a piece of real property. It’s a tear-down house that will only get the estate around $150-200k. There are liens from the City amounting to around $10k, a $40k mortgage and DSHS lien for approx. $250k. Clearly debts outweigh the asset.

PC would like to do right by mom and take on estate, sell property and satisfy debts as much as possible. He would also like to at least take a fee for his time. I haven’t done many insolvent estates so have a couple questions:

  1.  Do insolvent estates require intervention by the court and should the known creditors get notice of the initial probate proceedings in court?
  2.  If PC administers Estate, can he take a fee prior to debts being satisfied (to make it worth his time)?
  3.  If property sells on market, do real estate agents get commissions prior to other liens being paid?
  4.  Are creditors, like DSHS, entitled to any kind of role in the sale of the property – to ensure most value is received in sale?

Before looking over RCWs I thought I would ask – but any experience or insights would be appreciated.

Timothy C. Lehr

Attorney & Partner

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