[WSBAPT] Revocation of TODD?

Thu Feb 29 12:12:46 PST 2024

I share Josh's dislike for TODD's. Although this is admittedly off-topic, allow me a minute on my soapbox to argue against ever using a TODD.

  1.
Title companies don't like them. If the beneficiary of the TODD sells the property within 24 months of death, the Title company is going to ask the Seller to indemnify as to decedent's creditors or publish a non-probate notice to creditors. Clients don't want to give blanket indemnities for unknown creditors. The result is that a simple probate or non-probate NTC is often the best solution to shortening the 24-month period for potential claims against the Decedent's assets, even if they pass under a TODD. Then you haven't achieved the supposed cost-savings of the TODD, and you are better off transferring it through probate.
  2.
Fire insurance coverage is arguably terminated immediately upon the owner's death. See Strope Robinson v. State Farm (unpublished 8th Circuit case<https://caselaw.findlaw.com/court/us-8th-circuit/2110323.html>). While the PR/Estate is usually covered under a typical P&C policy, such coverage does not extend to the beneficiary of a TODD. In Strope-Robinson's case, the house burned down shortly after death, and coverage was properly denied because title had vested to a new owner under a TODD, and she did not enjoy the continuity of coverage that a PR/Estate would have.

For these reasons, I think it prudent to at least advise clients of potential dangers of TODD's, but in practice I think they should be avoided.
Best,
Nick

Nicholas Pleasants | Shareholder

[OseranHahnAttyatLaw 8]

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Mark Anderson <marka at mbaesq.com>
Sent: Tuesday, February 27, 2024 5:41 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Revocation of TODD?

Josh – you are either being kind or snarky.  I’ll take it either way.  Thanks.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Joshua McKarcher
Sent: Tuesday, February 27, 2024 12:48 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Revocation of TODD?

This is what I get for attempting an answer to this question given my admitted dislike for TODDs generally.

(I acknowledge they are wonderful for certain clients and situations, but I fear they give many clients/users more comfort than is warranted about a TODD’s effect in all but the most straightforward circumstances. Also, the Legislature has now made them $315+ tools, forgetting that in 2014 it was probably trying to help homeowners SAVE estate planning fees. But alas.)

So, if I’m reading 64.80.080(2) and then .100(3) and (4) together, it appears the last surviving joint tenant or surviving spouse can simply file an entirely new TODD and accomplish a revocation by inconsistency under .080(1)(a)(i) (even if it doesn’t reference any prior TODD, although I also would do as Mark suggests below, even if just to be kind).

Thank you, Mark, for this excellent education! Best, Josh

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 Mark Anderson
Sent: Tuesday, February 27, 2024 11:30 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Revocation of TODD?

I'm unaware of any "standard" form of revocation for a TODD.  However, I would expect any revocation to be signed by the surviving spouse and acknowledged like any other deed.  I would also ensure that the revocation itself clearly references the TODD that is being revoked, both in the body and in the indexing information on the first page.

Note that, under WAC 458-61A-303(3)(j) and (k), no real estate excise tax affidavit is required for either the TODD or the revocation.  I would not expect the tax rolls to be affected.

Also, RCW 64.80.100 (3)(a) would apply here, regardless of the characterization of the property as being community property.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
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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 Joshua McKarcher
Sent: Tuesday, February 27, 2024 8:35 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Revocation of TODD?

I think these situations come down to “will the assessor’s office and a local title company accept – i.e., change tax rolls and insure title – based on whatever you record.”

For my part, I’m wondering how anyone knows the property was community property such that a simple revocation by the surviving spouse is valid under the statute you mention. I could imagine one or the other of the above entities wanting to see something like a declaration recorded with the spouse’s death certificate as an exhibit (or separately recorded) declaring it was community property and it is now held by surviving spouse individually – and then perhaps that spouse records a new TODD next in line or “something” like that.

But I could also imagine nobody questioning any of that and a single document simply changing the TODD as the surviving spouse.

Which is why, to come full circle, see sentence number one above. ??Best, Josh

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 Adrienne Keith Wills
Sent: Monday, February 26, 2024 5:40 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Revocation of TODD?

Hi all,

Married couple worked with previous counsel to execute TODD for two properties, one to each adult child, and both TODD were recorded.  One spouse has since passed.  Surviving spouse now wants to change the property each child would receive.  Is there a standard revocation for a TODD? Or, would a notarized revocation that complies with RCW 64.80.080<http://app.leg.wa.gov/RCW/default.aspx?cite=64.80.080> and is then subsequently recorded be sufficient?

Thanks so much, Adrienne

 --

Adrienne Keith Wills, Attorney/Mediator

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