[WSBARP] To probate or not to probate

[Rich Holland]

I guess I come at this from the other side of the road, so to speak.  I represent lenders preparing a lot of these DIL transactions and we usually find it to be the borrower's family that makes it difficult.  Generically speaking, in a situation such as this, if the title is underwater simply to the first (and not buried in other debts), I'd think a non-probate affidavit, copy of the death cert, and standard DIL documents would solve this quickly.  So, I suppose it depends on who the lender is.

As for personal property, the bank doesn't have a security interest in those unless the deed of trust was quite unique indeed but you should read it before handing out advice about that.

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Jeanne Dawes
Sent: Tuesday, March 03, 2015 10:07 AM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] To probate or not to probate

My inclination is to walk away.  The retirement funds proceeds are not subject to creditors claims.  My experience with lenders and property underwater, is that they are almost impossible to work with.  They want to treat the PR like he or she is the borrower.  Can't do that.     I've tried on many occasions to get the lender to accept a deed in lieu, and it has taken months and months for that to happen, in the meantime, the lender has no problem starting a foreclosure action.  It makes no sense.

As to removing the personal property from the home, that is not part of the lender's security, but the value of it could be subject to creditor's claims.  I guess it would depend on the value.  If there is a high value, it might be worth opening a probate in order to comply with the creditor claim process and see what's out there.  My experience is lenders do not typically file a claim against the estate.  If the personal property only has sentimental value, and she is the sole beneficiary, I don't think anyone would raise the issue.

Others may have a different experience or opinion.  Hope this is helpful.

Jeanne

Jeanne J. Dawes
Attorney at Law
Gore & Grewe, P.S.
103 E. Indiana Avenue, Suite A
Spokane, WA 99207-2317
Voice:  509-326-7500
Fax:      509-326-7503
jjdawes at goregrewe.com<mailto:jjdawes at goregrewe.com>
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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Margaret Delp
Sent: Monday, March 02, 2015 2:18 PM
To: wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] To probate or not to probate

Hello Everyone:

I have a hypothetical low income client who is the sole heir at law to her daughter's estate.  Daughter died intestate.  Estate has 2 assets - a home which is slightly "under water" and a very small 401(k) account which designates the client as beneficiary.  The lender sent a Notice of Pre-Foreclosure Options to the family because of failure of the decedent to make a mortgage payment.  Neither the client nor the estate has the money to pay for a probate.

Question 1 - if the client walks away from the estate, and allows the house to go into foreclosure, are there any negative ramifications for the client?  She has already received the distribution from the 401(k).

Question 2 -- Client has access to the house.  Can client (who is the only heir) take possession of the personal property of decedent before bank forecloses - in other words, can she and the other family members who all get along clear everything out the house without a probate?

I'd appreciate your thoughts.
--Margaret
--
Law Office of Margaret Delp
2815 Howard Road, Second Floor
P.O. Box 292
Langley, WA 98260
(360) 579-4530 (telephone)
(360) 512-3114 (facsimile)

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