[WSBAPT] Will vs. TODD

[Mark Anderson]

At first blush, it seems to me that the Beneficiary should be able to disclaim or decline an interest in the property through the TODD but still preserve the Beneficiary's right to any interest in the property passing through the Will.  It's just that the beneficiary does not want to acquire title with all of the possible title blemishes and exposure to creditor claims.

RCW 11.86.011 defines an "interest" as including "any vested or contingent interest in such property" and, specifically, under RCW 11.86.011(o), an interest created "by surviving the death of a transfer or of a transfer on death deed."  The interest created by the transfer on death deed is separate and distinct from an interest created by a will.  By identifying the different categories of interests that may be disclaimed, I don't think that the statute could reasonably be interpreted as requiring an "all or nothing" approach to disclaiming an interest.

Perhaps it goes unsaid but, for the disclaimer of a TODD interest to be effective, the Death Certificate with a REETA must not be recorded with regard to that property.  That would foul things up for sure.

Mark B. Anderson
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Paul Neumiller
Sent: Tuesday, August 20, 2024 3:33 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Will vs. TODD

OK, so we know the title companies have multiple problems with Transfer on Death Deeds.  But, I was wondering has anyone done an analysis of whether it is a good idea to prepare a TODD anyway and give the family an option to use the TODD if the circumstances are right when the Decedent passes. (A lot of estate planning clients are coming in and requesting a TODD)  RCW 64.80.100 appears to lock-in the family if the Decedent signed and recorded a TODD.  But a beneficiary can still disclaim the interest using RCWs 64.80.110 and 11.86.041 "(1) Unless the instrument creating an interest directs to the contrary, the interest disclaimed shall pass as if the beneficiary had died immediately prior to the date of the transfer of the interest."

So, can a beneficiary disclaim receiving the real property via the TODD but still receive the real property via terms of the Decedent's Will?  (Yeah, I know, the recipients under the TODD and under the Will need to be the same.)  If so, then by preparing the TODD, the family may have the option to utilize the TODD if it's a good idea and disclaim the TODD if its not a good idea.  Any thoughts?


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