Washington’s Form 17 forms have additions to them (like a carbon monoxide detector disclosure). Here are the statutes (read them before you pull forms off any old website (including this one)!
Residential (unimproved): http://apps.leg.wa.gov/rcw/default.aspx?cite=64.06.015
Residential (improved): http://apps.leg.wa.gov/rcw/default.aspx?cite=64.06.020
Earlier this week there was a fairly in-depth colloquy between Oregon trust and estate attorneys that was broadcasted on the Oregon Bar Association’s listserv. Below is a selection of the various comments – unattributed.
First, the question from John Doe attorney:
Greetings: I have been asked to consult with Client on setting up a trust to “protect assets.” Client says the intention is to put client owned real property into an irrevocable trust prior to starting a new business to “avoid scrutiny.” I’m not sure what the client’s real hot button concern is at the moment.
My opinion of such trusts is generally that, in order to get the asset far enough out of grantor’s control to make it effective, grantor has to endure too many negative consequences to make it worthwhile. Do any of the assembled masses have particular thoughts or experience you are willing to share on the topic?
If there is a particular reference that anyone would suggest, I would be grateful to be pointed in that direction too.
And here are the responses:
1. There are ways in which an irrevocable trust can offer protection, and there are DEFINITELY tradeoffs, as you correctly note. As a starting point, I would read this article from Forbes on the Mastro bankruptcy (up here in Washington State), and consider how his asset protection plans did not work out so well.
2. Interesting case. There are a number of similar examples across the country where people on the cusp of financial oblivion take desperate measures to stash enough to preserve the good life. That said, asset protection planning is a hot topic and is becoming a big practice area all across the country. People read about it and it appeals to them in concept, although they don’t know very much about the execution. [John Doe's] client seems to be concerned about protecting personal assets from claims of potential future business creditors. Much of that can be accomplished with careful entity structuring for the new business. Maybe that’s all that is needed here. Continue reading
Yesterday the Washington Supreme Court issued its case in the Certified Question of Bain v. Metropolitan Mortgage.
Here’s the Opinion.
The primary issue before the court was whether MERS can be a lawful beneficiary on a deed of trust, with the power to appoint trustees under the Washington Deed of Trust Act when it does not actually hold the promissory notes that secures the deed of trust.
The court held that only the actual holder of the promissory note evidencing the debt may be a beneficiary with the power to appoint a trustee to foreclose. Or, as the court put it, “if MERS does not hold the note, it is not a lawful beneficiary.”
The court declined to answer what the legal effect is, if any, of a foreclosure, when MERS did foreclose as the beneficiary.
Our gut is that what is in the past is in the past, unless a borrower can prove fraud, or actual damages, based on Brown v. Household Realty, 146 Wn. App. 157, 189 P.3d
233 (2008) (holding that where the grantor of a deed of trust fails to invoke the remedies provided by the deed of trust act (ch. 61.24 RCW) before the deed is foreclosed in a trustee’s sale, the grantor waives claims based on the underlying obligation secured by the deed). But see RCW 61.24.127 which narrows Brown to some extent.
Here’s the opinion in Niday v. GMAC Mortgage, LLC.
Washington’s version of this case, Bain v. Metropolitan Mortgage, MERS, et al. is pending with the Washington Supreme Court.
We’ll post it when it comes out.
Bingo Investments, run by the Bingham family (who are married into the Fisher family) (read this article for background) are suing Tom Hazelrigg III, asking the Court to deny Hazelrigg a discharge of his debt. The alleged basis for the nondischarge complaint is fraud and selling unregistered securities. They claim that Hazelrigg and his associate, Scott Switzer, duped David Bingham, and the elderly Fran Graham into various real estate finance deals. We wonder whether David Bingham or Mrs. Graham had a lawyer when all these “investments” were made, and if Mrs. Graham is elderly, was anyone looking out for her interests?
One of the allegations is that Switzer and Hazelrigg told Bingham the “investments” would save Mrs. Graham on estate taxes. We’re not sure how that would have worked as an estate planning device… Fractional interest discounts maybe?
The discharge complaint is probably a “better safe than sorry” move by the Binghams. With Hazelrigg having pleaded the Fifth, and refused to disclose basic information – like bank account numbers – it seems like the US Trustee will likely ask for a general denial of discharge on that basis.
At last. New York Life has filed a motion to dismiss itself from the case, leaving the Coxes and Powell to duke it out in federal court.
Without taking a position either way, New York Life’s motion surveys the facts – who claimed what and when – and asks the court for permission to give the money to the court and let it decide who gets the money, and asks for an order releasing it from liability for paying the money to the wrong person. In support of the motion, New York Life refers to the policy, and Josh Powell’s numerous beneficiary designations. Part I of the insurance documents are here; Part II is here.