FUNDS OF DECEASED PATIENTS IN PUBLIC INSTITUTIONS

FUNDS OF DECEASED PATIENTS IN PUBLIC INSTITUTIONS.

Department of public institutions is permitted to retain funds belonging to deceased patients for a reasonable period of time providing a report is made to the department immediately.  No funds or property belonging to a deceased patient should be transmitted except to the duly qualified administrator or by order of court.

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                                                                   June 28, 1950

Mr. Van R. Hinkle, Supervisor
Department of Public Institutions
Olympia, Washington                                                                                                    Cite as:  AGO 49-51 No. 290

Dear Sir:

            This is in answer to your letter of May 9, 1950, requesting our opinion on the following questions:

            "(1) Is the Department of Public Institutions or a state institution permitted to retain moneys belonging to a deceased patient for a reasonable period after the death of such patient prior to remittance to the state treasurer?

            "(2) If the answer to the above question is in the affirmative is there any specified length of time that such moneys may be held?

            "(3) If immediate remittance to the department is necessary may the department permit such funds to remain in the custody of the superintendent of the institution involved, retaining control, however, over the disposition of such funds?  (The department has no fund or direct authority for the creation of a fund to retain such moneys.)

             [[Orig. Op. Page 2]]

            "(4) In the event a patient dies leaving known heirs, does the above chapter provide authority to the superintendent to remit such moneys to the heirs at their request without administration of the patient's estate?

            "(5) If the answer to the above question is in the affirmative, what is the definition of an heir within the meaning of the above chapter?"

            Our conclusions are as follows:

            (1), (2), (3) Providing a report is made to the department at once, funds belonging to deceased patients may be retained either by the institution or by the department for a reasonable period.  No specific period is indicated, however we do not believe two years would be excessive.

            (4), (5) No funds or property belonging to a deceased patient should be transmitted except to the duly qualified administrator or by order of court.

                                                                     ANALYSIS

            As a basis for the consideration of your problem it is necessary to ascertain the true application of chapter 113, Laws of 1923 (Rem. Rev. Stat. §§ 1363-1 to 1363-2) which reads as follows:

            "Section 1. Where an inmate of any state institution dies, leaving no heirs known, but leaving money or property in the custody of the superintendent or head of such institution, such official shall at once make a report thereon and forward any such money or property to the director of business control and such money shall be paid into the state treasury for the general fund of the state.

            "Sec. 2. The property of such deceased inmate of any institution of the state, at the expiration of two years from the date of death of such inmate, where  [[Orig. Op. Page 3]] there are no heirs known, shall be appraised and sold at public auction to the highest bidder by the director of business control in manner and form as provided for public sales of personal property, and all moneys realized upon such sale, after deducting the expenses thereof, shall be paid to the state treasury for the general fund of the state."

            When a resident of this state dies intestate, without heirs, this estate is normally escheated and the proceeds, after administration, go to the permanent school fund.

            Regular escheat procedure requires the usual administration of the estate.  There are many cases where inmates of institutions die, intestate without heirs, and leaving no property or funds other than those deposited with the head of the institution.  To permit the disposal of such funds and property without the expense and trouble of administration, sections 1363-1 and 1363-2 were adopted.  We do not believe the disposal provisions of 1363-1 and 1363-2 are applicable in any case where an administrator has been qualified.  The state has no right to withhold such funds from an administrator even though there are no heirs.  To construe these sections to permit such withholding would lead us to the conclusion that this law is unconstitutional under the due process clause.  We cannot take this position when a constitutional and practical construction as outlined above is fairly indicated.

            You suggest that it would be a convenient plan for the department or the institution to hold funds belonging to deceased patients for a reasonable time, pending possible appearance of heirs or issuance of letters of administration.  Although this procedure is not authorized by the statute in the case of money neither is it forbidden.  As a practical matter, some period of abeyance is necessary to insure fairness to heirs and creditors, who, however diligent, might be precluded in their rightful claims by immediate transmission to the state treasury.  An immediate report must be made to the department by the head of the institution, but we can see no objection to holding the funds in either the institutions or department for two years or as long as the director deems advisable.  Further, as it appears that the department has no fund in which to hold such monies, it is permissible to hold such monies in the institution trust fund  [[Orig. Op. Page 4]] pending payment to the administrator, or forwarding to the department for payment into the state treasury.  Upon filing the report required by 1363-1, control of the funds passes to the department and such funds should not thereafter be paid out except on written authority from the department.

            As to handing over property and funds to heirs without waiting for an administrator to be appointed, we cannot recommend such a procedure.  The institution head is in the position of a trustee for such funds and might possibly be liable if they are handed over to one not entitled thereto.  In order to play safe, we suggest that no funds or property be turned over to anyone except a duly qualified administrator or executor, or upon a court order.

Very truly yours,

SMITH TROY
Attorney General

JAMES M. MORRIS
Assistant Attorney General