[WSBARP] TODD

[Dwight Bickel]

It looked like a simple question; unfortunately this is a very complicated answer.

It isn't clear what the intent of both parties would be. Different conveyances produce different results and risks. The past conveyance Grantor to client A and daughter B established tenancy in common, presumably 50% each if no share is stated.

Several solutions are described below. But note that all solution paths pose unavoidable risks that most people don't understand, that the apparent intent for a common distribution plan is not permanent or enforceable. If a deed establishes joint tenancy, at any time, either "joint tenant" can sever that tenancy and terminate the intended survivorship attribute, without the consent or notice to the other. Often without intending that result. Similarly, all TODDs are revocable until a death of the grantor.

Do client A and daughter B want their separate interests instead to be Joint Tenancy with a right of survivorship to the survivor? If their mutual intent is for the other to be the survivor, then a TODD, and two TODDs are not the right answer. If they want joint tenancy, one deed must be used. Unities of time, title, interest and possession. It is best to use a replacement deed signed by the Grantor, "to A and B, as joint tenants and not as tenancy in common." Ensure both A and B sign with acknowledgement certificates, to confirm the intent of both to hold in that way, which cannot be proven after the death of one.

Nearly the same joint tenancy result is obtained going forward by ONE deed signed by A and B "to A and B, as joint tenants and not as tenancy in common." Technically the property was first vested as tenancy in common, so only a replacement deed has the apparent intent for joint tenancy from the initial vesting.

But if A and B want to preserve tenancy in common, then the use of one or two TODDs is better than a replacement deed from the Grantor.

If A and B intend the share of each upon death to go to a third party (or different persons), then there is a huge difference between using one TODD signed by both versus two TODDs signed by each. There is a statutory difference between jointly signing one deed or each signing separate deeds. For example, A and B sign one TODD that would transfer to C. The effect of RCW 64.80.100 (3) for a jointly-signed TODD defers the transfer, if any, until after B dies. A jointly-signed TODD is not binding upon the survivor! In this scenario, if A dies, B is the sole owner of the property and has full legal right to transfer to anyone else without consent or notice to C. If a joint TODD is used, C has no ownership and no rights during B's life. B can terminate the intended transfer by A to C, and transfer 100% to anyone else, without consent or notice from C.

What do A and B intend upon the death of the first? Upon death of A, does A want C to hold tenancy in common with B, or does A want B to hold all ownership until B's death too. Either way, upon A's death, B can terminate the proposed transfer of B's interest to C. But if two deeds are used, the transfer to C occurs upon the death of A and B cannot affect that result.

If A and B intend the share of each upon death to go to the survivor, then one TODD signed by both, or two TODDs signed by each, will do that: (1) "A to B, effective upon death" and (2) "B to A, effective upon death."  That does not change their tenancy to joint tenancy. Each deed would pass to the other, effective separately. There would be no change in their respective ownership interests until the death of one of them. The use of one TODD signed by both accomplishes the same result, with the survivor receiving the decedent's share. The effect of RCW 64.80.100 (3) is moot because the TODD from B to A is deemed rescinded by the death of the Beneficiary.

If the intent of each is for the interest of A or B to go to another upon death, then two separate TODDs signed by A and B are probably their intent: (1) "A to C, effective upon death" and (2) "B to C [or D, etc], effective upon death." In this solution path, after death of A, the property will be vested in A and C as tenants in common. Thereafter, the TODD of B can be revoked unilaterally by rescission of the earlier TODD, by a replacement TODD "B to E, effective upon death,"] or by a voluntary deed to anyone else effective immediately, without C's consent, transferring B's 50% interest immediately.

There is no need for REETA related to the initial TODD. Upon death a REETA is required, but it is probably exempt from tax. See WAC 458-61A-202(6)(d).

If you would like to discuss more, specific to their intent, feel free to write privately or publicly, or to call me.

Dwight A. Bickel
Real Property Title Advisor
Washington Title Professional
Dwight at DwightBickel.com<mailto:Dwight at DwightBickel.com>
https:/dwightbickel.com
206-484-1976
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