Estate Admin with No Probate

[nwsteve]

Hoping the good folks here have some insight how to break through bank bureaucracy when managing an estate. Our challenge is coming from banks seeming to be able to open an estate checking account without having a Letter of Testamentary (LoT) from a probate count.
Do some risk of incapacity we guided DW's father to set up a living trust for his real estate and a pour over will. FIL passed away last March, and his bank has refused to allow access to the one bank account that was not in the trust or had a beneficiary until we present a LoT. Since we were successful in getting 90+% of his assets into the trust or covered with TOD beneficiaries. we were able to keep his assets requiring probate under 100K when probate is required.
No probate means no LoT from a probate court, We have completed the WA
Small Estate Affidavit but banks seem to be reluctant to accept it.

On a related note, can anyone verify that an estate ein and checking account needs to be established to administer funds flowing to beneficiaries and pay for expenses? Since we have the pour-over will, should we be just be opening a trust checking account and administering funds through it and ignore the estate ein?

The banks and their demand for probate is driving us nuts and the estate attorney has proved to be of limited help in dealing with the administrivia of the estate admin.
Thanks in advance

 

[SecondCor521]

IANAL.

An estate attorney is probably unlikely to be motivated to help with a small estate affidavit procedure. They may hope you'll give up and open probate (and hire them to do so). Around here we have a court assistance office which, while reluctant to give anything remotely resembling legal advice, usually has pity on people and will maybe answer simple questions.

My understanding (based on ID law, not WA law, and not having done it myself yet) is that the bank should accept the small estate affidavit, assuming it has been completed properly. "Reluctant" sounds like not a final answer - I'd press them to either accept it and give the family the funds, or officially decline it so I could ask them why and also ask the probate folks at the court how to deal with someone who doesn't accept such an affidavit. You might need to escalate at the bank, too.

On your other question, I'm not sure. I would be inclined to open the estate checking account, if you end up needing one, at some other bank than the one that's giving you trouble with the affidavit. Even though you may not actually technically need one, I understand that they are handy to have in the case that you receive a refund check made out to FIL over the next two years or so, for things like refunds from doctors offices, canceled purchases, canceled subscriptions, etc. It can also be used then to pay for estate expenses. The remainder, after quiescence, could then just be closed out to a trust account via WA's small estate procedures.

...

My Dad has a similar setup. The one thing I haven't figured out is notice to creditors - my state law seems to not handle that well in the case of no probate. I'd be interested in how you are or others might handle that aspect of it, in particular starting the clock on the time period for creditors to come forward. I doubt there will be any unknown creditors, but one never knows. I also know my Dad wants everything done "by the book", but I'd rather not do probate if it's not necessary.

 

[Sunset]

Interestingly, our bank was very helpful after i pointed out we didn't need a lawyer for the small affidavit form, only a notary, which was the bank employee !

He simply added DW as co-signer/owner to the existing bank account, so there is no real estate account, just the normal account. Some late checks etc, made out to the deceased were easily deposited.

I wonder for OP if the State's Office that makes the rules for banks could help, or the State office that created the small affidavit form would help.

 

[Montecfo]

This is a common problem as stodgy banks are more comfortable doing something a judge has approved.

I would escalate with the bank.

 

[RetMD21]

On a related note, can anyone verify that an estate ein and checking account needs to be established to administer funds flowing to beneficiaries and pay for expenses?

Well, the creditors won't care, right? I would think the trust's checking account would be best. In my planned next case, we have no real estate issues and no need for a trust. MIL has made me a co-owner of a small bank account that will suffice to pay expenses and collect refunds and payments.

 

[CRLLS]

The bank should be congratulated for not simply opening the account without legal authority. However, they should accept a properly filled out Small Estate Affidavit that has also been filed. I would push the issue with the higher ups provided you have completed the filings.

From: https://www.washingtonlawhelp.org/f...5-16CE09CF1821/9502en_successor-affidavit.pdf

Deliver the affidavit, a copy of decedent's death certificate, and a copy of RCW
11.62.010 to whomever (like the bank where decedent's account is) has the
property or owes the debt you are claiming.

I pretty sure that you will need an EIN number as any income earned by the estate (such as interest or dividends) will have to file Income taxes. The deceased's income tax obligation stops that day of their death. The day after that, any income earned would require taxes filed under the EIN, not the deceased's SSN. That means 2 filings in the year of death.

 

[nwsteve]

I pretty sure that you will need an EIN number as any income earned by the estate (such as interest or dividends) will have to file Income taxes. The deceased's income tax obligation stops that day of their death. The day after that, any income earned would require taxes filed under the EIN, not the deceased's SSN. That means 2 filings in the year of death.

OP Here. Thanks! This is exactly what I understood. We will need to file a 2022 tax return not to mention potential for the WA St to come back on any compliance issues associated with his HVAC business. Lots of wild cards.

I have been stunned how far the banks (now two different ones) are behind in terms of recognizing the Small Estate Affidavit and handling a non probate estate.
It has been particularly educational in how much jumping through hoops have a Trust has actually had. I have learned that we should have made sure deceased FIL put a checking account in the Trust. At lease, we got him to put his DD on one of his checking accounts.