[WSBAPT] Deed Question

Thu May 26 11:20:42 PDT 2016

Redacting the death certificate is a questionable practice in some counties.  In King County it is apparently required and no additional recording fee is charged.  In many other counties when you redact a public record and then record it,  it magically becomes a “nonstandard recording (because it is a changed public record i.e. not exactly like the original death certificate) and they charge an additional fee of $50!!

The Washington State Recorder’s Cover Sheet form has a requirement (bottom of the page)  that says: “Sign below ONLY if your document is Non-Standard. I am requesting an emergency nonstandard recording for an additional fee of $50 as provided in RCW 36.18.010...”  But even if you don’t sign it, the auditor’s office will deem it non-standard.

It is frustrating that different counties treat the simple recording of a redacted death certificate differently.  Here in Lincoln County I never redact because it suddenly adds $50 to the recording fee.

Josh

Joshua F. Grant, PS
Attorney at Law
P. O. Box 619
Wilbur, WA 99185
tel 509 647 5578
fax 509 647 2734

From: John McCrady 
Sent: Wednesday, May 25, 2016 3:25 PM
To: WSBA Probate & Trust Listserv 
Subject: Re: [WSBAPT] Deed Question

Thank you for reminding us of this change; it will take getting used to.

John McCrady

Counsel

Puget Sound Title Company

5350 Orchard Street West

University Place WA 98466

253-476-5721

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Mike Winslow
Sent: Wednesday, May 25, 2016 2:33 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Deed Question

In many counties an excise tax affidavit must be processed with the Treasurer before taking the CPA to the Auditor for recording. Soon this will be the law of the land since the DOR has issued regulations which take effect shortly.

Following from DOR:  

Recently passed legislation, SHB 2539, authorizes a new method to claim and document a valid inheritance exemption from the Real Estate Excise Tax (REET).  

The exemption is updated (effective of June 9, 2016) to allow it to be claimed by presenting a “Lack of Probate” affidavit along with a certified copy of the death certificate to the county.  This is in addition to the other traditional methods (noting that the affidavit of surviving spouse option will be absorbed by the lack of probate affidavit option).  

The legislation also makes minor modifications to documentation requirements and adds a requirement to record inheritance exemption documentation with the county auditor.

The documentation required is listed in Sec. 2. (1) (a) through (i) of the legislation.  The associated rule, WAC 458-61a-202, will not be updated prior to the effective date of this legislation.  Therefore, please use RCW 82.45.197(1) (a) through (i) as the legal reference on the real estate excise tax affidavit for claiming an inheritance exemption (on, or after June 9th) until such time as the rule is updated.

The Department’s website will be updated (forms, under “R” for real estate) to include a version of the “Real Estate Excise Tax Lack of Probate Affidavit” to assist taxpayers pursuing this method.  

Certified copies of death certificates maybe purchased from the Washington State Department of Health at:  

               http://www.doh.wa.gov/LicensesPermitsandCertificates/BirthDeathMarriageandDivorce/OrderCertificates  

Please feel free to contact our general contact number (360-534-1503) if you have any questions or suggestions when trying to process these.

Please share this message with others as you deem appropriate, it will be appreciated!

Thanks!

Mel Kirpes

Miscellaneous Tax Program Coordinator  |  Special Programs Division Washington State Department of Revenue

Capital Plaza Building  |  PO Box 47477  |  Olympia, WA 98504-7477

360/534-1434  |  F 360/534-1499  |  dor.wa.gov  |  melk at dor.wa.gov

Working together to fund Washington’s future

Following from Dwight Bickel, Senior Title Counsel:

Property Transferred by Operation of Law is Exempt from Real Estate Sales Tax Again

The Real Estate Excise Tax [REET] only applies to sales or real property. Transfers by operation of law have always been defined not to be sale, therefore exempt from REET. 

Transfers of ownership that are accomplished pursuant to court orders, such as partition, divorce, condemnation and quiet title, are not taxable. Changes in ownership to real property that occur by changes in the owner entity that are not due to sales are not taxable. Transfers that occur pursuant to devise made by a Will are not taxable. Transfers that occur due to the death of an owner pursuant to the legal effect of intestate succession, community property, joint tenancy, life estates and transfer on death deeds are not taxable. These changes in ownership are not required to pay REET, even if there is no probate or court proceeding.

However, since a statutory change in 2008, certain Treasurers have required excise tax if the heirs did not complete a probate. The purpose of RCW 82.45.197 since 2008 has been to allow recording of documents to show exempt transfers by operation of law. It specified the documentation to be provided to the excise tax desk to prove that the transfer was exempt.

About four years ago a couple County Treasurers began interpreting RCW 82.45.197 as authority to require heirs who receive title by inheritance to pay REET if they did not have proper documentation. The position taken was that a probate was required to avoid REET. This affected only a few people because most intestate and non-probate heirs were not recording documents and not filing excise tax affidavits.

Since February 28, 2014, a change was made to WAC 458-61A-303 [the regulation that explains when a real estate excise affidavit is required]. Now all transfers by operation of law are required to file an excise tax affidavit. Previously, the Regulations required an excise tax affidavit and specified the documentation that was required to claim exemption from REET for transfers by operation of law only when conveyance documents were recorded.

WAC 458-61A-303 (2) Affidavit required. In general, an affidavit must be filed

when ownership or title to real property transfers as evidenced by

conveyance, deed, grant, assignment, quitclaim, or any other document

effectuating the transfer including, but not limited to, the following:

(b) ((Conveyance)) Transfer resulting from a court order;

(g) ((Conveyance)) Transfer to an heir in the settlement of an

estate;  

The amendments passed this year expand the documentation that may satisfy the excise tax person and should promote having the real property records show evidence of such off-record changes in ownership. A new provision allows heirs to record a short “Lack of Probate Affidavit” to evidence the change of ownership. That Affidavit also is allowed where a Will exists, though has not been probated.

When title companies train examiners and title officers, it will be most important to emphasize that these changes and that recorded affidavit are completely unrelated to underwriting whether to insure against claims of heirs without a probate. The Department of Revenue has drafted its own suggested affidavit form. None of those forms will include the information that title companies have traditionally requested for underwriting.

Michael A. Winslow

1204 Cleveland Ave.

Mount Vernon, WA 98273

Ph. 360-336-3321

Em. Mike at winslegal.com

This message is from an attorney, so it’s confidential. If you are not the intended recipient, it’s too late to stop reading this message, but you may not use it for any improper purpose. Huge Disclaimer available upon request.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of John McCrady
Sent: Wednesday, May 25, 2016 12:22 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Deed Question

Typically, all that is needed is to record the Community Property Agreement along with a redacted death certificate.  Many practitioners also prepare and record a community property survivorship affidavit .

John McCrady

Counsel

Puget Sound Title Company

5350 Orchard Street West

University Place WA 98466

253-476-5721

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Jennifer Nugent
Sent: Wednesday, May 25, 2016 11:43 AM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Deed Question

Good morning, 

I was preparing a TOD Deed for Wife and discovered that the property was still in Husband and Wife’s name.  Husband passed away several years ago.  The two has a Community Property (CP) agreement but nothing was done with it at the time of Husband’s death and his estate was never probated. 

Procedurally, do I need to prepare a CP deed, get it recorded and then after that complete a TOD deed and have it recorded?  

Also, does anyone have an example of a CP Deed they would be willing to share?

Thanks, 

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