[WSBARP] Inheritance question

Thu May 3 17:59:19 PDT 2018

Thanks to you both. Many of those issues had been swirling around in my
head and it is immensely helpful to see them articulated so well.

Could I do a promissory note with the H&W as the drawers of the note with
H's mother as the promisee? I'm familiar with the due on
sale/transfer/death clauses in mortgages. Do I just crib that language from
a mortgage to include in the note?

Thanks again!

----

Gibbs Law Offices
Anthony F. Gibbs
Attorney & Counselor at Law
15600 Redmond Way
Suite 101
Redmond, WA 98052
Ph: 206.734.4374
Fax: 206.971.5053
Email: gibbslawoffices at gmail.com
Web: www.gibbslawoffices.com
 Disclaimer
 This e-mail is intended to constitute an electronic communication within
the meaning of the Electronic Communications Act, 18 U.S.C. §2510. This
communication may contain confidential, proprietary, or legally privileged
information and is transmitted for the sole viewing and use of the intended
recipient. Any review or distribution to other recipients is not permitted
and does not waive the confidential or privileged nature of the
communication. If you receive this message in error, please immediately
delete it and notify the sender.

On Thu, May 3, 2018 at 1:34 PM, Eric Nelsen <Eric at sayrelawoffices.com>
wrote:

> I like Marcus's solution. Maybe not as emotionally satisfying to Mom to
> give a loan that only becomes a gift at death, but it evades almost all the
> legal conundrums.
>
>
>
> Sincerely,
>
>
>
> Eric
>
>
>
> Eric C. Nelsen
>
> SAYRE LAW OFFICES, PLLC
>
> 1417 31st Ave South
>
> Seattle WA  98144-3909
>
> phone 206-625-0092
>
> fax 206-625-9040
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.
> wsbarppt.com] *On Behalf Of *Marcus Fry
> *Sent:* Thursday, May 03, 2018 12:54 PM
>
> *To:* WSBA Real Property Listserv
> *Subject:* Re: [WSBARP] Inheritance question
>
>
>
> Eric has give a very nice and thorough analysis as always!
>
>
>
> A simple solution for now is for mom to loan the money to the friend and
> the friend’s wife with a due on death or sale/transfer clause.  The
> interest rate could be set at the applicable federal rate with the friend
> and the friend’s wife as joint obligors.  Mom could then bequeath the debt
> under the will to her son.
>
>
>
> Marcus J. Fry
>
> Lyon, Weigand & Gustafson, P.S.
>
> *Confidentiality: *This e-mail transmission may contain information which
> is protected by attorney-client, work product and/or other privileges.  If
> you are not the intended recipient, you are hereby notified that any
> disclosure, or taking of any action in reliance on the contents, is
> strictly prohibited.  If you have received this transmission in error,
> please contact us immediately and return the e-mail to us by choosing Reply
> (or the corresponding function on your e-mail system) and then deleting the
> e-mail.
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.
> wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>] *On Behalf Of *Eric
> Nelsen
> *Sent:* Thursday, May 03, 2018 12:41 PM
> *To:* WSBA Real Property Listserv
> *Subject:* Re: [WSBARP] Inheritance question
>
>
>
> That's a difficult situation in which to preserve a separate property
> right. Actually, marriage in general is a difficult situation in which to
> preserve a separate property right. :-)
>
>
>
> Gift letter won't work by itself. That makes the money traceably F's
> separate property (SP) upon F's receipt of the funds, but then F messes
> that up by using the funds to make improvements to community property (CP)
> real estate. The use of SP funds to make improvements to CP real estate
> does *not* raise a presumption of gift to the community, but it *does*
> mean that *at best*, F retains an equitable right of reimbursement for
> the SP contribution to CP improvements, and that right would be protected
> by an equitable lien on the improved real estate.
>
>
>
> Even that is not certain, though. The case law for equitable reimbursement
> almost always involves a reimbursement *to the community* for use of CP
> funds to make improvements to SP real property--the exact opposite of this
> situation. The natural bias of the law is to be reluctant to allow
> reimbursement to SP out of CP assets; it's not an express legal rule, but
> the court is reluctant to say a community should reimburse someone's SP
> contribution because the basic image of marriage under CP law is that both
> spouses contribute into creating a community estate of assets.
>
>
>
> And keep in mind, the judge in a divorce has jurisdiction over all
> property, both SP and CP, and makes a "fair and equitable" division of all
> property, which can include in some circumstances the allocation of one
> party's SP to the other. So even if it's thoroughly documented that the
> money was SP, that doesn't mean F will get it back in event of divorce.
>
>
>
> Probably the best that could be done is a document signed by F and F's
> wife, in which they agree and acknowledge that F is contributed $X of SP
> funds toward improvements on the house, and that F's wife agrees that the
> contribution is not a gift to the community. That provides firm evidence,
> later on, of the SP contribution if they divorce years later and other
> records are no longer available, or if one of them dies and there is a
> dispute with their heirs concerning their interest in the house.
>
>
>
> You could consider adding a clause that specifies how it should be
> reimbursed in event of death, divorce, sale, whatever. But then you get
> into, what should the reimbursement be? Just $X back, even if it's 30 years
> later? What about interest on it? Or should F get a portion of increased
> value of the real estate? But if you do that, then is the real estate
> "actually" becoming partly SP? Or is it more than F's wife is entering into
> a contract with F to reimburse?
>
>
>
> Also, is that a post-nuptial agreement that requires scrutiny of
> substantive and procedural fairness, and possibly separate counsel for F's
> wife if there is any doubt about the substantive fairness? Or is it more in
> the nature of an agreement as to status of property, in which F and F's
> wife agree that the status of the house is X% community and Y% F's SP (or
> perhaps 100% community but F has an equitable right to reimbursement for $$
> protected by a lien)?
>
>
>
> See WSBA Community Property Deskbook (4th ed. 2014), Ch. 3.4 "Right of
> Reimbursement: The Equitable Lien." It is pretty thorough.
>
>
>
> Sincerely,
>
>
>
> Eric
>
>
>
> Eric C. Nelsen
>
> SAYRE LAW OFFICES, PLLC
>
> 1417 31st Ave South
>
> Seattle WA  98144-3909
>
> phone 206-625-0092
>
> fax 206-625-9040
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.
> wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>] *On Behalf Of *Anthony
> F. Gibbs
> *Sent:* Thursday, May 03, 2018 11:50 AM
> *To:* WSBA Real Property Listserv
> *Subject:* [WSBARP] Inheritance question
>
>
>
> A friend's mother wants to contribute a lump sum of money to help with a
> remodel of a portion of the community home in which friend and friend's
> wife live. Friend's mother does not want the money to be subsumed into the
> community property but to instead remain friend's separate property even
> after remodel.
>
>
>
> Friend's mother wants that the lump sum contribution to the community home
> remain traceable and devisable through friend's estate and not be
> commingled with wife's estate.
>
>
>
> Would a gift letter allow that lump sum to remain traceable and therefore
> allow him to, for example, give that "extra" lump sum according to his
> will? Or, would they be wiser to do a separate property agreement
> addressing the lump sum and identifying it as separate property of H?
>
>
>
> If it's complicated, I'd be happy to refer him.
>
> Thanks,
> Anthony
>
> ----
>
>
>
> Gibbs Law Offices
> Anthony F. Gibbs
> Attorney & Counselor at Law
> 15600 Redmond Way
> Suite 101
> Redmond, WA 98052
> Ph: 206.734.4374
> Fax: 206.971.5053
> Email: gibbslawoffices at gmail.com
> Web: www.gibbslawoffices.com
>  Disclaimer
>  This e-mail is intended to constitute an electronic communication within
> the meaning of the Electronic Communications Act, 18 U.S.C. §2510. This
> communication may contain confidential, proprietary, or legally privileged
> information and is transmitted for the sole viewing and use of the intended
> recipient. Any review or distribution to other recipients is not permitted
> and does not waive the confidential or privileged nature of the
> communication. If you receive this message in error, please immediately
> delete it and notify the sender.
>
> _______________________________________________
> WSBARP mailing list
> WSBARP at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbarp
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20180503/c6d05b19/attachment.html>