[WSBAPT] Probate Inventory - "Mortgage, notes, and other written evidences of debt"

[Eric Nelsen]

Hello all- Happy New Year! General question about what goes on the inventory.

In the past few years I have been seeing more and more Estate Inventories that, under the section "Mortgage, Notes, etc.," list the debts that the decedent owed to someone, rather than the debts that someone owed to the decedent. In some cases I've seen debts like credit card balances listed, even though those would only be valid debts if a proper creditor claim were filed.

My understanding is that the inventory category in RCW 11.44.015(1)(c)<https://app.leg.wa.gov/RCW/default.aspx?cite=11.44.015> refers to debts that are owed to the decedent, since the decedent's right to receive payment is an asset of the Estate. Am I wrong?

While the statute does require inclusion of "statement of all encumbrances, liens, or other secured charges against any item," my understanding is that the secured encumbrance on an asset is listed with the asset itself, since the PR is to show the "fair net value" of the item, net of the encumbrances. I think that unsecured debts of the decedent like credit card balances, personal loans, etc., are not included in the Inventory at all.

So, for a house with a mortgage, the inventory would list the house under category (1)(a) "Real Property" and include the DOD balance on the mortgage in that same spot, and show the fair value net of the mortgage. The mortgage would not be listed in (1)(c), because the mortgage is a debt the decedent owes, not an asset.

I did look at WSBA Probate Procedure and Tax Manual deskbook (3d ed. 2009), and it's not super clear about it but it does seem to agree that it should be a list of the decedent's rights to receive payment, not a list of decedent's debts. See Ch. 3.A.2, and the example inventory at Sec. 3.F.3. (Actually, the Deskbook combines 11.44.015(1)(c) and (1)(d) to create a category of "mortgages, notes, and cash" instead of separating the bank accounts from the debts owed to decedent.)

Is there other authority out there, that suggests an Inventory should include unsecured debts, or that it should include a separate categorical list of the debts owed by the decedent?

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>

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