[WSBAPT] Washington Estate Tax - CIR Property

Thu Jan 30 11:05:38 PST 2020

Thank you Eric, but you are too kind, I wasn’t actually thinking of
anything, at least not clearly.  

From: wsbapt-bounces at lists.wsbarppt.com On Behalf Of Eric Nelsen
Sent: Thursday, January 30, 2020 9:19 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>;
smatyas at curranfirm.com
Subject: Re: [WSBAPT] Washington Estate Tax - CIR Property

You might be thinking of the State Registered Domestic Partnership law,
which was the early statutory method of giving marital rights to same-sex
couples who couldn't get legally married. When marriage equality was passed,
most SRDPs converted automatically to legal marriages. (There are
exceptions, but most.)

CIR is a separate thing, applying to unmarried cohabiting couples who meet
the other criteria for it. No state registration, no marriage, just
cohabitation and sufficient marital-like commitment under the CIR criteria.

Sincerely,

Eric

Eric C. Nelsen

Sayre Law Offices, PLLC

1417 31st Ave South

Seattle WA 98144-3909

206-625-0092

eric at sayrelawoffices.com <mailto:eric at sayrelawoffices.com> 

From: wsbapt-bounces at lists.wsbarppt.com
<mailto:wsbapt-bounces at lists.wsbarppt.com>
<wsbapt-bounces at lists.wsbarppt.com
<mailto:wsbapt-bounces at lists.wsbarppt.com> > On Behalf Of Martin
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To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com
<mailto:wsbapt at lists.wsbarppt.com> >; smatyas at curranfirm.com
<mailto:smatyas at curranfirm.com> 
Subject: Re: [WSBAPT] Washington Estate Tax - CIR Property

I am probably behind in my understanding but didn’t marriage equality take
out the intimate theory in some way?  Is the effect of previous law still
undecided?  

From: wsbapt-bounces at lists.wsbarppt.com
<mailto:wsbapt-bounces at lists.wsbarppt.com>  On Behalf Of James W. Spencer
Sent: Wednesday, January 29, 2020 2:05 PM
To: smatyas at curranfirm.com <mailto:smatyas at curranfirm.com> 
Cc: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com
<mailto:wsbapt at lists.wsbarppt.com> >
Subject: Re: [WSBAPT] Washington Estate Tax - CIR Property

Greetings Steven:

This is a fascinating question, perhaps of first impression (I am very
interest to learn if anyone has tackled this issue). 

I teach community property at Seattle University Law (and have for almost a
decade). We’re in the throes of CIR right now in class. One of CIR’s
foundational cases, Connell, says:

“We hold income and property acquired during a [committed intimate]
relationship should be characterized in a similar manner as income and
property acquired during marriage. Therefore, all property acquired during a
[committed intimate] relationship is presumed to be owned by both parties.
This presumption can be rebutted. See Estate of Madsen v. Commissioner of
Internal Rev., 97 Wash.2d 792, 796, 650 P.2d 196 (1982). All property
considered to be owned by both parties is before the court and is subject to
a just and equitable distribution. In re Marriage of Lindsey, 101 Wash.2d
299, 307, 678 P.2d 328 (1984). The fact title has been taken in the name of
one of the parties does not, in itself, rebut the presumption of common
ownership. See Lindsey, 101 Wash.2d at 306–07, 678 P.2d 328; Merritt v.
Newkirk, 155 Wash. 517, 520, 285 P. 442 (1930).”

-Connell v. Francisco, 127 Wn.2d 339, 351, 898 P.2d 831 (1995) (emphasis
added).

I think that Olver will strengthen an argument to DOR that the decedent’s
actual estate is that property net the CIR interest:

“
our basic framework for property distribution after death [is
that]
[f]irst, the decedent’s property must be inventoried; a personal
representative must determine what property belongs in the decedent’s
estate. RCW 11.44.015. Significantly, it was the inventory of Cung’s estate
that Olver challenged in this action on behalf of Thuy’s estate. Clerk’s
Papers (CP) at 14 (Contradiction of Inventory). Only after the contents of
the estate are established can the personal representative distribute the
contents of the estate according to a valid will or the rules of intestacy.
As the Court of Appeals aptly explained, ‘we do not look to the intestacy
statutes to determine what the decedent owned.’ Olver, 131 Wash.App. at 144,
126 P.3d 69. Once a decedent’s share is determined, ‘that partner’s share is
the estate upon which the inheritance rules will operate.’ Id. at 145, 126
P.3d 69.”

-Olver v. Fowler, 161 Wn.2d 655, 669, 168 P.3d 348 (2007).

As community-like property is subject to the analogous presumption under RCW
26.16.030 under Connell, I think there’s a good faith argument to be had
vis-à-vis estate valuation and estate tax reduction by the CIR interest, at
least insofar as DOR is concerned.

Happy to field any questions.

Sincerely,

James W. Spencer

Attorney at Law

Brothers & Henderson, P.S.

2722 Eastlake Avenue East, Suite 200

Seattle, Washington 98102

Phone: (206) 324-4300 x106

Fax: (206) 324-3106

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<wsbapt-bounces at lists.wsbarppt.com
<mailto:wsbapt-bounces at lists.wsbarppt.com> > On Behalf Of Steven Matyas
Sent: Wednesday, January 29, 2020 1:41 PM
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Subject: [WSBAPT] Washington Estate Tax - CIR Property

Colleagues,

Has anyone had experience arguing to the Washington Department of Revenue a
reduction in the gross taxable estate of a decedent based on the one-half
community-like portion of the estate belonging to a committed intimate
partner? We are handling an estate that is taxable, but a potential CIR
partner has filed a TEDRA petition asking for an equitable division of the
community-like portion of the estate. If this were a marriage, DOR would not
require the surviving spouse’s community share to be included in the taxable
estate of the decedent. But what about the community-like portion of an
estate belonging to a CIR partner?

Thank you in advance,

Steven Matyas 
CURRAN LAW FIRM 
555 West Smith Street
Kent, WA 98032
Main: 253 852 2345 
Fax: 253 852 2030 

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