[WSBAPT] Unknown TODD and Community Property Issues

Tue May 7 09:09:15 PDT 2024

This is from a successful Memo of P&A about 20 years ago:

            "To be a proper and valid gift of community property, a spouse must have the express or implied consent of the other spouse.  To be a proper and valid conveyance of community real property, both spouses must join in the execution of the deed.  Section 26.16.030 of the Revised Code of Washington, in part, states: "Property not acquired or owned, as prescribed in RCW 26.16.010 [Separate Property of Husband] and 26.16.020 [Separate Property of Wife], acquired after marriage by either husband or wife or both , is community property.  Either spouse, acting alone, may manage and control community property, with a like power of disposition as the acting spouse has over his or her separate property, except:..."

(2)       Neither spouse shall give community property without the express or implied consent of the other.

(3)       Neither spouse shall sell, convey, or encumber the community real property without the other spouse joining in the execution of the deed or other instrument by which the real estate is sold, conveyed, or encumbered, and such deed or other instrument must be acknowledged by both spouses.....

In Nichols Hill Bank v. McCool, Jr., 104 Wn.2d 78, 701 P.2d 1114 (1985) (a copy of which is attached as Attachment "A"), the Washington Supreme Court interpreted RCW 26.16.030(2) where a husband guarantied a loan to a son without his wife's consent.  The loan was discharged in bankruptcy for the son and the bank sought judgment against the husband's separate property and the husband's one-half interest in the community property. The trial court dismissed the claim against the husband's community property.  The Supreme Court held that:

"RCW 26.16.030(2) specifically requires the consent of both spouses before a gift of community property can be effectuated. If we found that a creditor could reach the donor spouse's one-half interest in community property, the total amount of that property would be diminished. We would, in effect, be defying the statutory mandate by allowing the community estate to be gratuitously reduced without the consent of both spouses."

Id. at 88.  The Supreme Court affirmed the trial court judgment dismissing the claim against the husband's community property solely because the wife had not given consent.
            A second case is factually similar to this matter. In Bosone v Bosone, 53 Wn. App. 614, 768 P.2d 1022 (1989) (a copy of which is attached as Attachment "B"), a husband and wife entered into a community property agreement that converted all of their separate assets into community property. Unbeknownst to the wife, the husband deeded their residence to his children from a former marriage.  After the husband's death, his children from the former marriage listed the residence for sale and the surviving spouse brought a quiet title action. The Washington Court of Appeals affirmed the trial court's grant of summary judgment to the wife and declared the deed void and invalid under both RCW 26.16.030(2) (requiring consent of both spouses for gift of community property) and RCW 26.16.030(3) (requiring both spouses to join in and acknowledge a conveyance of community real property.)"

God luck, maybe its still good law and maybe it'll work against a TODD.

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Lewis, Amy C.
Sent: Monday, May 6, 2024 9:07 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Unknown TODD and Community Property Issues

Julie,

              Under RCW 64.80.120, the beneficiary "is liable for an allowed claim against the transferor's probate estate and statutory allowances to a surviving spouse . . . ."

              Also take a look at RCW 26.16.030(3), which requires both spouses to join in the execution of deeds and related real estate documents.  I also wonder how RCW 64.80.040, which indicates a TOD deed is not testamentary, interacts with RCW 26.16.030(2), which restricts the ability of one spouse to makes gifts of community property.

Amy Lewis, Attorney
Pronouns she/her/hers
[cid:image002.png at 01DAA05E.39C6F0C0]
909 A Street, Suite 600 | Tacoma, WA 98402
phone 253.572.4500 | fax 253.272.5732 | www.eisenhowerlaw.com<http://www.eisenhowerlaw.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 Julie Martiniello
Sent: Monday, May 6, 2024 8:53 PM
To: Trust and Probate Section <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Unknown TODD and Community Property Issues

Hello All,

I would love some thoughts on the below scenario:

H&W own property as husband and wife since 1980. One week before H dies, he executes and records a TODD giving his 50% interest in the property to one of their joint children. W was not aware of this until we researched the property during the consult. There is no known Will.

My question is does the husband's TODD override the wife's intestacy rights or spousal allowance under the RCW? I do not think an omitted spouse claim can be made against a TODD.

--

Respectfully,

Julie Martiniello, Partner
Dimension Law Group, PLLC
Office:  206-973-3500│Fax:  206-577-5090
Email: julie at dimensionlaw.com<mailto:synthia at dimensionlaw.com>
www.dimensionlaw.com<http://www.dimensionlaw.com/>

631 Strander Blvd, Bldg A, Suite G, Tukwila, WA 98188

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