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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal>Thank you, Roger. There was a Community Property Agreement that left everything to the surviving spouse. There was no separate property for either of them. We are thinking of doing the probate as an insolvent estate and getting all the creditors discharged after notice. I think that will work. The surviving spouse doesn’t need a family allowance, and there are no funds to give her one. She has social security and retirement funds from her deceased husband. I’m still wondering if these retirement amounts, as non probate assets, would be available to the creditors. Also, I’m wondering if I need to set out all the probate and non-probate assets in the inventory since they all go to the surviving spouse by means of the CPA and so I can just state that all the property was community property and it all passed to the surviving spouse via the CPA and then list all the debts which are about $95,000. I don’t think I have to list all the probate and non-probate assets if they have all gone to the surviving spouse anyway. The CPA was recorded as was the decedent’s death certificate.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Still puzzling a little bit.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Susan<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Susan Donahue<o:p></o:p></p><p class=MsoNormal>Law Office of Susan Donahue<o:p></o:p></p><p class=MsoNormal>125 West 2<sup>nd</sup> Avenue, Suite “B”<o:p></o:p></p><p class=MsoNormal>P.O. Box 81<o:p></o:p></p><p class=MsoNormal>Twisp, WA 98856<o:p></o:p></p><p class=MsoNormal>(509) 996-5944 (phone)<o:p></o:p></p><p class=MsoNormal>(509) 362-9692 (fax)<o:p></o:p></p><p class=MsoNormal><a href="mailto:sdonahue@sdonahuelaw.com"><span style='color:#0563C1'>sdonahue@sdonahuelaw.com</span></a><o:p></o:p></p><p class=MsoNormal><a href="http://www.sdonahuelaw.com"><span style='color:#0563C1'>www.sdonahuelaw.com</span></a><o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com> <b>On Behalf Of </b>Roger Hawkes<br><b>Sent:</b> Thursday, March 05, 2020 12:34 PM<br><b>To:</b> WSBA Probate & Trust Listserv <wsbapt@lists.wsbarppt.com><br><b>Subject:</b> Re: [WSBAPT] insolvent estate<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Susan: at the very least you should negotiate with creditors; probability is that most of them would accept half rather than argue trying to get it all.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><div><p class=MsoNormal>Roger Hawkes, WSBA # 5173<o:p></o:p></p><p class=MsoNormal>Hawkes Law Firm and Sultan Lawyers<o:p></o:p></p><p class=MsoNormal>19944 Ballinger Way NE, Shoreline, WA 98155 and<o:p></o:p></p><p class=MsoNormal>423 Main, Sultan, WA 98294<o:p></o:p></p><p class=MsoNormal>206 367 5000<o:p></o:p></p><p class=MsoNormal>360 799 6438<o:p></o:p></p></div><p class=MsoNormal><o:p> </o:p></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> <a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbapt-bounces@lists.wsbarppt.com">wsbapt-bounces@lists.wsbarppt.com</a>> <b>On Behalf Of </b>Susan Donahue<br><b>Sent:</b> Wednesday, March 4, 2020 12:10 PM<br><b>To:</b> 'WSBA Probate & Trust Listserv' <<a href="mailto:wsbapt@lists.wsbarppt.com">wsbapt@lists.wsbarppt.com</a>><br><b>Subject:</b> [WSBAPT] insolvent estate<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>I have a situation where the decedent left a will with everything to his wife and also left a Community Property Agreement. The real property has been transferred to the wife with filing the death certificate at the county auditor’s office.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>My question is about what to do about the creditors. The decedent left about $95,000 in debt—unbeknownst to his family. There are no assets in the estate except for the real property. There are life insurance policies totaling about $95,000. One option is to use the life insurance funds to pay the creditors and not go through probate at all since the real property has already been transferred via the CPA. This is okay with the wife. She has onset of dementia although still capable of understanding and deciding what to do. Her daughter is helping her decide what to do. There is the concern that she will need Medicaid in the future to go into an assisted living home. They want to transfer the real property (house) to the daughter with a quit claim deed so that it would be protected from Medicaid in the future. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>If we go through probate and declare insolvency, I understand that the creditors cannot access the life insurance money. BUT, in the probate process for an insolvent estate, can the creditors demand that the real property be sold to pay them? I think that they can, but I want to get some confirmation about this. Could selling the real property to pay the creditors if we did the insolvent probate action be avoided if the wife quit claimed the real property to her daughter right now thus making it unavailable to creditors in an insolvent probate action, or would that be viewed as an improper way to shield that asset? <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Finally, doing an insolvent probate action would cost a lot in attorney fees, maybe $10,000 or more because there are 22 creditors that would have to be contacted, etc. and then there would be the hearing to discharge them that they might challenge and try to get the real property even though or even because it was quit claimed to the daughter immediately before filing the insolvent probate action. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>I’m wondering if there are any strategies or circumstances that I am not thinking about. The plan right now is to pay the creditors with the life insurance money and be done with it and not do a probate at all. That way, the house is secured for the wife for sure and she can safely quit claim it to her daughter. (Although the 5-year look-back on Medicaid might capture the house unless the mother applies for Medicaid 5 years after quit claiming it to her daughter. But I’m not absolutely certain about this, either.) The mother and the daughter don’t seem upset to lose the $95,000 in insurance money. In fact, they are in favor of this plan, but I want to be sure I am giving them the best option since so much money is involved. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Thank you.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Susan<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Susan Donahue<o:p></o:p></p><p class=MsoNormal>Law Office of Susan Donahue<o:p></o:p></p><p class=MsoNormal>125 West 2<sup>nd</sup> Avenue, Suite “B”<o:p></o:p></p><p class=MsoNormal>P.O. Box 81<o:p></o:p></p><p class=MsoNormal>Twisp, WA 98856<o:p></o:p></p><p class=MsoNormal>(509) 996-5944 (phone)<o:p></o:p></p><p class=MsoNormal>(509) 362-9692 (fax)<o:p></o:p></p><p class=MsoNormal><a href="mailto:sdonahue@sdonahuelaw.com">sdonahue@sdonahuelaw.com</a><o:p></o:p></p><p class=MsoNormal><a href="http://www.sdonahuelaw.com">www.sdonahuelaw.com</a><o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p></div></body></html>