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<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">John McCrady,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">Thank you so much for this post. I have heard this said but never had the chance to look up the source – nice to have it now.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>John McCrady<br>
<b>Sent:</b> Thursday, November 15, 2018 10:40 AM<br>
<b>To:</b> WSBA Probate & Trust Listserv<br>
<b>Subject:</b> Re: [WSBAPT] House for surviving spouse<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">You might take a look at 12 USC 1701j-3:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><a name="d"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(d)</span></span><span class="heading2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
Exemption of specified transfers or dispositions </span></span><span class="chapeau"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333;background:yellow;mso-highlight:yellow">With respect to a
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1202940583-2124459218&term_occur=8&term_src=title:12:chapter:13:section:1701j–3" title="real property loan">
real property loan</a> secured by a lien on residential real property</span></span><span class="chapeau"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333"> containing less than five dwelling units, including a lien
on the stock allocated to a dwelling unit in a cooperative housing corporation, or on a
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-2070006528-2124459219&term_occur=3&term_src=title:12:chapter:13:section:1701j–3" title="residential manufactured home">
residential manufactured home</a>, <span style="background:yellow;mso-highlight:yellow">
a lender may not exercise its option pursuant to a due-on-sale clause upon</span>—</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_1"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(1)</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">the creation of a lien or other encumbrance subordinate to the
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1106367012-2124459217&term_occur=8&term_src=title:12:chapter:13:section:1701j–3" title="lender">
lender</a>’s security instrument which does not relate to a transfer of rights of occupancy in the property;<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_2"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(2)</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">the creation of a purchase money
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-949122880-1870944313&term_occur=33&term_src=title:12:chapter:13:section:1701j–3" title="security">
security</a> interest for household appliances;<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_3"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(3)</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">a
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1280882667-918618941&term_occur=33&term_src=title:12:chapter:13:section:1701j–3" title="transfer">
transfer</a> by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_4"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(4)</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">the granting of a leasehold interest of three years or less not containing an option to purchase;<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_5"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(5)</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333;background:yellow;mso-highlight:yellow">a
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1280882667-918618941&term_occur=34&term_src=title:12:chapter:13:section:1701j–3" title="transfer">
transfer</a> to a relative resulting from the death of a borrower;</span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333"><o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_6"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(6)</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333;background:yellow;mso-highlight:yellow">a
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1280882667-918618941&term_occur=35&term_src=title:12:chapter:13:section:1701j–3" title="transfer">
transfer</a> where the spouse or children of the borrower become an owner of the <a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-993141291-1698169690&term_occur=29&term_src=title:12:chapter:13:section:1701j–3" title="property">
property</a>;</span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333"><o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_7"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(7)</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">a
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1280882667-918618941&term_occur=36&term_src=title:12:chapter:13:section:1701j–3" title="transfer">
transfer</a> resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-993141291-1698169690&term_occur=30&term_src=title:12:chapter:13:section:1701j–3" title="property">
property</a> settlement agreement, by which the spouse of the borrower becomes an owner of the
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-993141291-1698169690&term_occur=31&term_src=title:12:chapter:13:section:1701j–3" title="property">
property</a>;<o:p></o:p></span></p>
<p class="MsoNormal"><a name="d_8"></a><span class="num2"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">(8)</span></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333;background:yellow;mso-highlight:yellow">a
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1280882667-918618941&term_occur=37&term_src=title:12:chapter:13:section:1701j–3" title="transfer">
transfer</a> into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a
<a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-1280882667-918618941&term_occur=38&term_src=title:12:chapter:13:section:1701j–3" title="transfer">
transfer</a> of rights of occupancy in the <a href="https://www.law.cornell.edu/definitions/uscode.php?width=840&height=800&iframe=true&def_id=12-USC-993141291-1698169690&term_occur=32&term_src=title:12:chapter:13:section:1701j–3" title="property">
property</a></span><span lang="EN" style="font-size:10.5pt;font-family:"Helvetica","sans-serif";color:#333333">; or<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">John McCrady<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">Counsel<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">Puget Sound Title Company<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">5350 Orchard Street West<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">University Place WA 98467<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">253-476-5721<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D">j.mccrady@pstitle.com<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:11.0pt;color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:11.0pt">From:</span></b><span style="font-size:11.0pt"> wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Paige Buurstra<br>
<b>Sent:</b> Thursday, November 15, 2018 10:08 AM<br>
<b>To:</b> wsbapt@lists.wsbarppt.com<br>
<b>Subject:</b> [WSBAPT] House for surviving spouse<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Hello all, <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">I have a client who owns a home as his separate property. He is in his seventies and recently got remarried. He has 2 children from his first marriage. He wants to allow his current spouse to live in the home
for up to 5 years after he passes. There is still a mortgage on the home. Wife would be responsible for paying the mortgage. At the end of 5 years or when Wife decides to move out, He then wants surviving spouse to receive 20% and each child to receive 40%
of the equity. (this is not a taxable estate)<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">My first inclination is to create a living trust and transfer the house into the trust, including the period of years and ultimate disposition in the trust terms. However, my concern is that at the time of
client’s death, we publish notice to creditors, the mortgage company is on notice that client is deceased and calls note due so that house must be refinanced or sold. Children will not want to be on the hook for a mortgage that wife is obligated to pay. Mortgage
co would not likely lend to the trust. Essentially, lender could force the sale right away, thwarting the purpose of the trust.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Has anyone run into this or have any other ideas or suggesetions? <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Thanks,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Paige Buurstra<o:p></o:p></span></p>
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