[WSBAPT] IRA/community property/probate question
Dale Young
lowelldaleyoung at msn.com
Thu Jan 15 14:37:37 PST 2015
No, to tell the honest truth, we haven't solved it yet, so any thoughts would be helpful.
Thanks.
Lowell Dale Young, LLC From Real Estate to Your Estate
Lowell Dale Young Advice to Real Estate Buyers & Sellers
Attorney At Law Wills, Trusts, Estate Planning
119 First Ave S. #200 Probate and Avoiding Probate
Seattle, WA
Mailing address:
P.O. Box 25510
Seattle, WA 98165
Phone: 206-364-0200
Fax: 206-363-0663
Website: www.ldyounglaw.com
From: john at cairn-law.com
To: wsbapt at lists.wsbarppt.com
Date: Wed, 14 Jan 2015 07:31:30 +0000
Subject: Re: [WSBAPT] IRA/community property/probate question
Dale,
Did you resolve this issue? If not, I have some thoughts (which may or may not be helpful).
Thanks,
John
John Creahan
Cairn Law, PLLC
206-621-5848
Sent from my phone
From:
Dale Young
Sent:
1/9/2015 2:38 PM
To:
wsbapt at LISTS.WSBARPPT.COM
Subject:
[WSBAPT] IRA/community property/probate question
Listmates, here's one to get you reaching for your old copy of Harry Cross'
Community Property law review article.
It's the classic stepmother vs. child from the first marriage.
Client is named as beneficiary of her recently deceased father's IRA account (incidentally she is also named as the PR in his will and is
his sole heir in the will to all of this property).
The father's surviving spouse (the client's stepmother) is also claiming the entire IRA account.
The IRA was opened after his marriage to the stepmother, but the source of the funds can be traced to reveal it was about 15% separate funds and 85% community funds. (by the way the funds came from an 40lk rolled over into the IRA, which
40lk was 85%/15% community vs. separate funds)
The IRA beneficiary form says if a community property state is involved then the form naming someone other than surviving spouse as a beneficiary
has to have been signed by the surviving spouse. The surviving spouse had refused to sign as of the date of death.
.
RCW 26.16.030 provides in part:
(1) Neither person shall devise or bequeath by will more than one-half of the community property.
(2) Neither person shall give community property without the express or implied consent of the other.
My view of community property is that each spouse owns half, unless an agreement or court says otherwise, so in a person's will they can leave their 1/2 of community property to whomever
they choose.
However, an IRA is a nonprobate asset, not normally controlled by a will (unless it is a superwill, which this is not).
My conclusion is that the surviving spouse gets 100% of the community property portion of the account because the will has no effect upon the nonprobate asset. And, the beneficiary designation for the IRA account to
his daughter cannot control the community property portion of the IRA account.
Therefore, the answer on who gets the money is just an accounting exercise to establish (1) what % of the invested funds were separate funds and
(2) how much the current balance is the earnings and accumulations on the separate portion and how much on the community portion??
Thus, the lions share of the account goes to the surviving spouse and the much smaller portion goes to the daughter?
Am I right so far??
Any comments would help.
Thanks,
Dale Young
Lowell Dale Young, LLC From Real Estate to Your Estate
Lowell Dale Young Advice to Real Estate Buyers & Sellers
Attorney At Law Wills, Trusts, Estate Planning
119 First Ave S. #200 Probate and Avoiding Probate
Seattle, WA
Mailing address:
P.O. Box 25510
Seattle, WA 98165
Phone: 206-364-0200
Fax: 206-363-0663
Website: www.ldyounglaw.com
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