[WSBARP] Transfer on Death Deed Issues

Tue Aug 25 16:32:43 PDT 2015

John:
The TODD is not a gift because the transfer is not effective until death because grantor can revoke the deed.  Because it is revocable, I think that would addressed the special use classification issue because the grantor hasn't transferred anything yet and is still the owner for all intents and purposes (including Medicaid qualification).  Therefore, the grantee shouldn't be required to sign because they actually haven't received anything.  Also because it is revocable, it will not start the 5-year look back period for Medicaid eligibility purposes.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
Adoption Attorney*
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Yakima, Washington  98907
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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of John L
Sent: Tuesday, August 25, 2015 2:52 PM
To: 'WSBA Real Property Listserv'
Subject: [WSBARP] Transfer on Death Deed Issues

[cid:image005.png at 01D0DF53.A8D20480]

Listmates:

I have recently been asked to prepare a Transfer on Death Deed (TODD) for a client.  I have read the great article by Al Falk in the Summer 2014 RPP&T  newsletter which answers a number of my questions but not the following:

The property to be transferred is classified as a special use under 84.34.  The Spokane County Assessor in charge of special use in Spokane County was uncertain as to continuing the classification.  It was suggested that the grantee must sign the excise tax affidavit (REET) section 6 before recording the TODD.  This requirement seems odd as the transfer by TODD may be done without the knowledge of the transferee at the time the TODD is recorded.  By requiring the transferee to sign the REET suggests that a transfer occurs at the time the TOOD is recorded or signed. This should not be the case as the TODD form suggested by Mr. Falk specifically provides that:

The recording of this Revocable Transfer on Death Deed is not a "sale" as defined in RCW 82.45.010(1) and is therefore not subject to real estate excise tax. The transfer that will occur under this Revocable Transfer on Death Deed at the time of the Grantor's death is exempt from the Washington Real Estate Excise Tax by reason of RCW 82.45.010(3)(b) and WAC 458-61A-202(7).

I also note that WAC 458-30-275 provides that "The treasurer should notify the assessor when classified land has been transferred by inheritance or by a transfer on death deed without a notice of continuance."

I also have concerns about whether the TODD creates a gift for the purposes of Medicaid at the time recorded. I would think that it would not but this could create a serious problem if the grantor would be ineligible for Medicaid as a result of the TODD filing.

  Does anyone have experience with these issues.

John H. Loeffler

8414 N. Wall, Suite A
Spokane, Wa 99208-6171
Phone: 509.467.6767
JohnL at Ollps.com<mailto:JohnL at Ollps.com>
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