[WSBAPT] community property agreements

Tue Jul 20 09:03:33 PDT 2021

We have regular issues with the recorders offices, so I appreciate the frustrations. On the other hand, I have been recording CPAs and Affidavits for years in King and other counties for years.

Are you putting coversheets on each document that you record, with full legal descriptions, tax parcel numbers along with grantor (decedent) and grantee (surviving spouse)? I usually include for reference the recording number of the original deed.

I usually do in two steps. The first a simple recording of the CPA with coversheet. The second a recording of the Community Property Affidavit (lack of probate) with a copy of the death certificate (appropriately redacted) attached along with the coversheet which also references the recording number of the original deed as well as the recording number of the CPA.

Then I send in the request for the change of "taxpayer name" to the county, so that the online search in parcel viewer eventually shows only the survivor's name, since so many third parties believe this means something.

Oh, and we use Simplifile as well. At least the rejections are quicker.

Heather

Heather S. de Vrieze
Attorney-at-Law
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Joshua McKarcher
Sent: Tuesday, July 20, 2021 7:35 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] community property agreements

Ryan,

Well that really is fascinating. May I suggest the following options:

-Involve DOR per the earlier post that I believe included a name and contact (unless I'm misremembering the post in which that was shared).

-Ask them for an example of the "deed" they are talking about in another situation where title conveyed to surviving spouse via CP. It must be recorded and thus public record, so they should have no problem providing it.

-Ensure you're talking about the same kind of affidavit as others are (so to speak), or simply change it to make it "dummy proof." Include in your affidavit the legal description of the properties the affiant is claiming sole title to by virtue of the previously recorded CP agreement (referenced by both original date of agreement and date/number of recording). Cite the relevant statutes (or WACs even?) to connect the dots for a future uninitiated reader. Then tell them to explain why the affidavit doesn't "do" everything their requested "deed" would do.

-Ask them to call a fellow auditor or assessor in another county to ask how the other 30+ counties are able to achieve this without a separate "deed."

-Try the prosecuting attorney's office (civil division if there is one) to get someone focused on the actual relevant law.

Good luck and maybe let us know how this resolves.

Also, note that step one in my view should not even include a death certificate. Even that may be confusing them because it "mixes" the process contemplated by the WACs. Consider if even that is confusing them because they believe your step one is intended to "achieve" something more than simply memorializing the agreement's existence.

All the best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.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 Ryan P. Coon <cole-gilday at stanwoodlaw.net<mailto:cole-gilday at stanwoodlaw.net>>
Sent: Monday, July 19, 2021 9:52 AM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] community property agreements

This is pretty much how we have been handling CPA's, in the two steps that you outline. The counties are generally fine with us on the first step where we're just recording the CPA with an attached death certificate. Where the counties (Island, Snohomish, and King) dig their heels in is when we subsequently attempt to record the CPA Affidavit (with death certificate and REETA).

Island County Treasurers office just sent back our CPA Affidavit stating that "Per the Department of Revenue Real Estate Excise Tax (DORREET) division a Community Property Agreement (CPA) cannot by used to transfer ownership of property in Washington State. A separate deed for conveyance of title is required."

When we talk to the title companies they are also dumbfounded as to why these are getting rejected. It sounds like we may need to get the DOR involved and see if they can offer some direction to the Counties.

Very Truly Yours,
Ryan P. Coon
Law Office of Cole & Gilday, P.C.

10101 - 270th St. NW
Stanwood, WA 98292
(360) 629-2900 (Telephone)
(360) 629-0220 (Fax)

This message contains confidential and privileged information that is intended only for the named recipient(s).  Unless you are the named recipient or authorized agent thereof, you are prohibited from reading, copying, distributing or otherwise disseminating such information.  If you receive this communication in error, please notify the sender immediately.

On 7/16/2021 6:17 PM, Joshua McKarcher wrote:
One important distinction here between recording a CP agreement to memorialize it vs. recording documents to FULFILL it (and change title):

Recording a CP agreement before its fulfillment requires no REETA because no title transfers (e.g., if you record it after signing, even though recordation is not required (contra Idaho, where it must be recorded in each county where real property is located before either spouse dies)). See WAC 458-61A-303(3)(g).

But, look above (3)(g) at sub (2)(a): Recording a death certificate and affidavit to confirm the death of a spouse who was party to a CP agreement and to effectuate transfer of title - i.e., to fulfill the agreement - does require a REETA (which itself should have attached a copy of the recorded CP agreement and a certified copy of the death certificate), because title is transferring and that transfer is exempt from tax. See WAC 458-61A-202(6)(a) (https://app.leg.wa.gov/wac/default.aspx?cite=458-61A-202).

In sum, WAC 458-61A-303(2)(a) relates to fulfillment of the CP agreement after one spouse dies (title transfers = REETA required), and (3)(g) relates to the simple recordation of the document without transfer of title (no affect on title = no REETA required).

Same concept as with Transfer on Death Deeds: no REETA when merely memorialized, but REETA when fulfilled/effectuated.

Practice Tip: if wanting to change title after Spouse 1's death with a previously unrecorded CP agreement, do not do it all in one step. You're mixing WACs and staff could be confused easily.

Instead, first, record the CP agreement by itself. Done. No REETA. (Use Simplifile - you'll never regret paying for it!) Nobody knows to reject anything because you're not announcing anyone's death or changing title.

Now you have the document that you must attach to the REETA to change title in step two. So, second, submit the REETA for approval to Treasurer with proposed affidavit supporting CP agreement and related REETA (with attached copy of recorded CP agreement and certified DC) and $10 check. Treasurer signs off on REETA, you record with Auditor the affidavit in support of CP agreement with DC as exhibit. Voila! If anyone argues, you have extremely clear path - for each separate transaction - in the above WACs.

(This is all so absurdly complex that I answer these emails now and then just to provide myself a chance to CONFIRM the law is the same as the last time I looked! Ha!)

Happy weekend, fearless estate planners! Best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.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 Nicholas Pleasants
Sent: Friday, July 16, 2021 5:05 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com><mailto:wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] community property agreements

Never had a problem recording CPA's in King County, no REETA required. And I don't think it should matter what county you record it in, as long as it becomes a public record. And King County is on Simplifile. So perhaps a practical solution is to record all CPA's in King County :)
Have a nice weekend all!
Best,
Nick

From: <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> on behalf of Joshua McKarcher <josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>>
Reply-To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Date: Friday, July 16, 2021 at 4:11 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] community property agreements

Yikes! No problems I'm aware of in the southeast corner of the State here.

Unless the law changed, it sounds like you have some educating to do. Or, if that falls flat, I'd next be inclined to let the county prosecutor's office know (gently, at first) that its clients (assessor and auditor, I presume) are making up rules and disregarding law that could have material impact on county citizens and expose the county to legal liability. Perhaps an "opinion" from their prosecutor's office confirming that state of the relevant laws would help?

Or maybe I'm naïve and you'll have more of a battle on your hands.

Another approach is to get your friends at the local title company on board. If they confirm that title insurers are not suddenly requesting deeds like you describe, maybe their friends in the assessor's and auditor's offices will find their way to play ball.

Good luck!

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.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 Robert R. Cole
Sent: Friday, July 16, 2021 2:53 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] community property agreements

We are having frustrating problems in the recording of Community Property Agreements (along with the death certificate and an Affidavit) to transfer property to the surviving spouse.  Counties are refusing to record them, saying that they need a deed from the surviving spouse to the surviving spouse.  Even including a REETA doesn't work.   And Island County Treasurer is now saying that the CPA  doesn't pass title, and they won't record a deed from the (now deceased) surviving spouse's estate because the property is still titled in the deceased spouse's name, even tho the CPA etc was recorded over a decade ago.  Are CPAs now basically worthless?
--

Very Truly Yours,
Robert R. Cole
Law Office of Cole & Gilday, P.C.

10101 - 270th St. NW
Stanwood, WA 98292
(360) 629-2900 (Telephone)
(360) 629-0220 (Fax)

This message contains confidential and privileged information that is intended only for the named recipient(s).  Unless you are the named recipient or authorized agent thereof, you are prohibited from reading, copying, distributing or otherwise disseminating such information.  If you receive this communication in error, please notify the sender immediately.

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