[WSBAPT] IRA/community property/probate question
Sam Furgason
sam at furgasons.com
Fri Jan 16 14:41:17 PST 2015
Dale,
3 quick thoughts:
1. Frequently announced appellate court policy is that the courts will
strive to carry out the decedent’s intent. Here, that intent is expressed in
the beneficiary designation, at least as to the decedent’s interest.
2. The IRA agreement is a contractual agreement, but not necessarily
legally controlling. Under qualified plans the U.S. S.Ct. decided – I
believe in Egelhoff – that for the sake of administration of ERISA plans,
the plan documents and federal law mandate that the administrator distribute
to the spouse, BUT, cases have been brought contending that the intended
beneficiary can go after the initial distribute to recover funds which
should have gone to another. That principle might apply here, where the
daughter could seek a judgment for the amount of the IRA funds which were
the property of the decedent on the grounds that to do so would carry out
the decedent’s intent. The requirement for the spouse to sign the form does
not prevent a court from ordering the administrator, or the surviving
spouse, or both, to deliver the separate and community ½ of the funds to the
daughter.
3. Oh, and also, what does the IRA contract provide where the wife does
not sign? Does the entire IRA pass to the spouse, or to the decedent’s
estate, or what? It would seem to me that your fact leave open that obvious
issue that the decedent died without any valid beneficiary designation,
which often means the proceeds pass to his estate, not to the surviving
spouse.
S
From: wsbapt-bounces at lists.wsbarppt.com
[mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Dale Young
Sent: Thursday, January 15, 2015 2:38 PM
To: wsbapt at LISTS.WSBARPPT.COM
Subject: Re: [WSBAPT] IRA/community property/probate question
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: <http://www.ldyounglaw.com/> www.ldyounglaw.com
_____
From: john at cairn-law.com <mailto:john at cairn-law.com>
To: wsbapt at lists.wsbarppt.com <mailto: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 <mailto:lowelldaleyoung at msn.com>
Sent: 1/9/2015 2:38 PM
To: wsbapt at LISTS.WSBARPPT.COM <mailto: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: <http://www.ldyounglaw.com/> www.ldyounglaw.com
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