[WSBAPT] converting Jtwros to Community property

[Eric Nelsen]

Kristina, you didn't mention whether the clients wanted to continue to have the property JWTROS in addition to holding it as CP. I agree with Doug that purchase prior to marriage as JTWROS raises a question about applicability of the statute he cites.

If they want to preserve right of survivorship and merely confirm community property, then a quit claim deed could state something like, "Grantors X and Y, a married couple, for no consideration and with the express intent to convert to community property, convey and quitclaim to X and Y, a married couple, as their community property, and as joint tenants with right of survivorship pursuant to Ch. 64.28 RCW, the following-described real estate..."

If they just want to hold the house as community property, and no longer have an automatic right of survivorship that operates outside of probate, then a quit claim deed works that states, "Grantors X and Y, a married couple, for no consideration and with the express intent to convert to community property, convey and quitclaim to X and Y, a married couple, as their community property, the following-described real estate..." But that will sever the right of survivorship, so that upon the death of the first spouse, a probate would be necessary to formally transfer the deceased spouse's interest to the survivor.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040



From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Doug Schafer
Sent: Thursday, January 28, 2016 2:32 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] converting Jtwros to Community property

RCW 64.28.040  Character of joint tenancy interests held by both spouses or both domestic partners.
(1) Joint tenancy interests held in the names of both spouses or both domestic partners, whether or not in conjunction with others, are presumed to be their community property, the same as other property held in the name of both spouses or both domestic partners. Any such interest passes to the survivor of the spouse or survivor of the domestic partner as provided for property held in joint tenancy, but in all other respects the interest is treated as community property.
http://app.leg.wa.gov/RCW/default.aspx?cite=64.28.040

As I recall, this was enacted in the mid-1980s due to concerns that the IRS would deny a full step-up in basis (applicable to CP) on homes and other capital assets at the first death if a couple had titled the asset as JTROS.  However, I don't know if this statute would apply to JTWROS property that a couple purchased before their marriage, though it may apply because subsequent to the marriage the property is "held in the names of both spouses."

Doug Schafer, in Tacoma.

On 1/28/2016 1:42 AM, Katharine P. Bauer wrote:

Deed is easiest
On Jan 27, 2016 10:09 PM, "Kristina DeVore" <kristina at devore-law.com<mailto:kristina at devore-law.com>> wrote:
I have clients who purchased a home together before marriage and took title as joint tenants with right of survivorship and now want the property to be held as community property. They do not want a community property agreement for all their assets but they do want this asset to be community property.  Can they have a community property agreement or some type of property status agreement with respect to one asset?  Or do they need a deed from themselves, to themselves to create community property?  Any advice would be greatly appreciated.

Thanks,
Kristina


Kristina S. DeVore | Attorney & Counselor at Law
KRISTINA DEVORE LAW FIRM, pllc | 300 W. 15th Street, Suite 305 | Vancouver, WA  98660
Phone: (360) 695-0535<tel:%28360%29%20695-0535> | Fax: (360) 737-4154<tel:%28360%29%20737-4154> | kristina at devore-law.com<mailto:kristina at devore-law.com>




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