[WSBARP] Bargain sale or Gift of Community Property

Wed Jan 17 15:03:34 PST 2018

In general, an improper gift of community property is absolutely void. Estate of Yiatchos, 60 Wn.2d 179, 373 P.2d 125 (1962), rev'd in part on other grounds, vacated in part sub nom. Yiatchos v. Yiatchos, 376 U.S. 306, 84 S. Ct. 742, 11 L. Ed. 2d 724 (1964); see also In re Marriage of Schweitzer, 132 Wn.2d 318, 937 P.2d 1062 (1997). A sale of community property without spousal consent is voidable, and there is a question as to whether a bona fide purchaser without notice can retain possession of the sold item. Note, however, that this case law is largely developed with regard to personal property.

Simply because of the nature of real estate transfers, with deeds and public recording and so forth, the distinction between gift and sale becomes less important compared to the name the community property was publicly held in (H only? Any indication of marital status on the deed?), the recording of other instruments of public record indicating a marital interest, etc. For that third party, if they have any knowledge of the marriage, they likely can't achieve BFP status. It's not just what's in the record, but also a question of whether the buyer could have determined marital status with the exercise of reasonable diligence. Campbell v. Sandy, 190 Wash. 528, 69 P.2d 808 (1937); Dane v. Daniel, 23 Wash. 379, 63 P. 268 (1900).

I pulled the case citations from the WSBA Community Property Deskbook.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Kary Krismer
Sent: Wednesday, January 17, 2018 1:24 PM
To: wsbarp at lists.wsbarppt.com
Subject: Re: [WSBARP] Bargain sale or Gift of Community Property

I would agree with Eric about looking at the actual deed to see the price paid for excise tax.  If Roberto cannot do that easily, he can email me directly with an address or grantor/grantee and I could easily look it up.

As to case-law I thought I would find something in my 30+ year-old law school outlines, which I haven't looked at for over 10 years!  What I was looking for wasn't there, but there is the 1910 case of Daly v. Rizzutto involving out of state owners, and the court held that a BFP would prevail because there would be no way of knowing that the property was community property.  If this was for $10, then not a BFP, but if it was for something more reasonable it's possible any CP restrictions on transfer might disappear.

Kary L. Krismer

John L. Scott/KMS Renton

206 723-2148
On 1/17/2018 12:42 PM, Eric Nelsen wrote:
I'm not sure I'm following the facts. I'm reading that two years before his death, H sold some Washington real estate to a third party for basically nothing--amounts to a gift. My answer assumes I got that right.

You say "$10"--that's a common recital of consideration in a deed and bears no relationship to the actual sale price. I would verify the actual sale price through the county assessor records and/or the Real Estate Excise Tax Affidavit filed with the deed. Even a real estate agent might be able to call up the information relatively quickly, or maybe you could find sale information on Zillow.

If the property sold by H was community property, see RCW 26.16.030(2) and (3)<http://app.leg.wa.gov/RCW/default.aspx?cite=26.16.030> and associated cases. One spouse alone has no authority to transfer community real property without joinder of the spouse. Joinder typically means also signing the deed, but the spouse can also waive the right, acquiesce, ratify after the fact or be estopped from challenging the transfer, depending on the facts. See WSBA Community Property Deskbook Section 4.7 (4th ed. 2014).

I'd go down that road first, before fighting the more difficult issues of capacity and undue influence. If you feel like talking through the issues in more detail, feel free to call me, or email me off the list.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1417 31st Ave South
Seattle WA  98144-3909
phone 206-625-0092
fax 206-625-9040

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Roberto Castro
Sent: Wednesday, January 17, 2018 12:10 PM
To: wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Bargain sale or Gift of Community Property

Listmates

I am striking out finding case law in WA dealing with a bargain sale or gift of highly appreciated property for a pittance ($10) of community property without knowledge of spouse or children of the couple; this purported transaction occurred 2 years before H's death. I have an estate where H &W lived in AZ and two  years prior to H's death he purported to make a bargain sale of highly appreciated property in WA to a non-family member without knowledge of W or the children of the marriage.  You can imagine the uproar and issues of capacity and undue influence.  Any case law or thoughts is appreciated.

Thank you.

Regards,

Roberto H Castro
Attorney
312 E. Trow Avenue
P.O. Box 747
Chelan, WA 98818

5 South Wenatchee Avenue, Ste 210
Wenatchee, WA 98801

509.679.3668 (D)
509.266.7104 (F)
rcastro at rcastrolaw.com<mailto:rcastro at rcastrolaw.com>

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