[WSBAPT] Conveyance of CP from Estate

[Lewis, Amy C.]

John,

                My practice is to have the surviving spouse sign the deed in his/her individual capacity in those circumstances.  RCW 11.02.070 provides that the whole of the community property is subject to probate administration “for all purposes of this title”.  Arguably this may include the power to convey the whole of the community property.  I still think it’s cleaner to have the surviving spouse sign.


Amy C. Lewis, Attorney

[cid:logo43a21c]

ESTATE PLANNING & PROBATE

1201 Pacific Avenue, Suite 1200 | Tacoma, WA 98402
phone 253.572.4500 | fax 253.272.5732 | www.eisenhowerlaw.com<http://www.eisenhowerlaw.com/>

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of sullaw at comcast.net
Sent: Tuesday, June 14, 2016 1:36 PM
To: Listserv, WSBA
Subject: [WSBAPT] Conveyance of CP from Estate

Listmates:
I think I know the answer to this but would appreciate one or more additional sets of eyes.

H dies. Among the assets of his sizeable probate estate is a parcel of real property held while alive as CP with W who is the PR.

H's will provides for distribution of probate assets to: (1) QTIP Trust and (2) Credit Shelter Trust.

Final distribution is not carried out until about three years after date of death. Form 706 filed on date of death values with no estate tax owing because of use of lifetime exemption and unlimited marital deduction through QTIP election. But the distribution must equitably reflect the overall gains and losses experienced by the assets post mortem to avoid capital gain recognition. PR/W, with advice and assistance of counsel, prepares a spreadsheet illustrating an intent to make a non-pro rata distribution. The spreadsheet indicates that the CP parcel at issue is to end up titled roughly 80% in the QTIP Trust and 20% in the SS outright.

To carry out this intent the PR executes and records a quitclaim deed conveying "all interest in the following described real estate," (the CP parcel) to the QTIP Trust. The Grantor on the deed is the SS solely in her capacity as PR. A few months later the SS signs (without acknowledgement or recording - but those are separate issues) a quitclaim deed as Trustee of the QTIP Trust conveying 20% of the parcel to her in her individual capacity.

Now, almost 20 years later, SS wants to gift the entire parcel, whether owned by the QTIP Trust or her, to an LLC owned by her children.

Here's my question: Even though the PR is authorized to administer all CP, in order for 100% of a CP parcel to end up in a QTIP Trust under the deceased H's Will, doesn't the SS/W have to join in the conveyance in her individual capacity with respect to what was formerly her undivided 50% CP interest? Am I not correct that the estate does not hold title to her CP interest. In my fact pattern above, if the QTIP Trust quitclaims all its interest to the kid's LLC (assume the gift is authorized) doesn't the SS also have to separately quitclaim her interest since she never deeded it to the QTIP Trust? The unrecorded quitclaim deed conveying 20% back to the SS has me questioning my understanding that the estate only has authority to convey the deceased H's half of the CP.

Thanks for your thoughts.



Best regards,

John J. Sullivan<mailto:dlyons at lyonslawoffices.com>,

Attorney



Lyons | Sullivan

10655 NE 4th Street, Suite 704

Bellevue, WA 98004

425·451·2400 tel 425-451-7385 fax

www.dljslaw.com<http://www.dljslaw.com/>



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