[WSBARP] Clearing co-signor names from title

[Sara Longley]

Lovely listmates,

Having received no substantive responses to my over-long earlier email, I will ask a simpler question:

Is it possible to clear co-signor names from title using the exemption under 458-61A-215(2)(e), when the co-signors (parents) assisted the purchaser with a gift of money towards her down payment?

It appears not, even when the gift was not intended to create any ownership interest.  But I would love to be wrong.

Thanks,
Sara


[cid:image001.png at 01DB0E74.D67AAA40]

Sara D. Longley, Attorney

(Main) 360.378.4450 ext. 107

(Direct) 360.468.7230

Slongley at pnwtaxlaw.com<mailto:Slongley at pnwtaxlaw.com>

www.pnwtaxlaw.com<http://www.pnwtaxlaw.com/>



This email and any attachments may contain confidential and/or attorney-client privileged information. If you are not the intended recipient please immediately delete the email and notify the sender.

________________________________
From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> on behalf of Sara Longley <slongley at pnwtaxlaw.com>
Sent: Thursday, March 6, 2025 9:56 AM
To: wsbarp at lists.wsbarppt.com <wsbarp at lists.wsbarppt.com>
Subject: [WSBARP] Clearing co-signor names from title

Hello listmates,

I have a client wishing to clear the names of her parents off the title of her King County home.  The parents were added as co-owners when they co-signed her mortgage for the purchase money.  They also helped her with the down payment.  My client made all the mortgage payments herself and the home is now paid off.  Dad is deceased, left his estate to Mom, and Mom has signed a Quitclaim Deed.

I am looking at the exemptions in the WAC and it appears that the standard exemption to clear co-owner names in these circumstances is 458-61A-215(2)(E).  It's all very straightforward, and the language of the WAC directly corresponds to my client's situation.

BUT the DOR form for use to claim this exemption, "Real Estate Excise Tax Certification Co-Signor Exemption", requires that the co-signors answer "NO" to each of a series of questions including "Did the "co-signor" contribute funds towards any down payment, earnest money, or closing costs related to the initial purchase [...]?"  And, because my client's parents gifted her money to help with the down payment, the answer to this question is yes and the form (though not the WAC) states that the co-signor exemption is not applicable to the transfer.

My clients' parents had no intention of retaining an ownership interest in the property.  According to my client they assisted all of their children with down payment money for home purchases, and the money was intended as a gift.

Any hints on how to work around this issue?  Can my client's mother sign a separate declaration stating the down payment was a gift and get back inside the exemption?

I believe my alternative would be a two-step process of recording a Lack of Probate Affidavit to pass Dad's interest to Mom, and then recording Mom's Quitclaim Deed to pass her interest to Client.  This is do-able, but I would much rather save the expense of the second recording fee and the additional drafting time.

Thanks in advance for any tips or advice you can offer.

Sara






[cid:image001.png at 01DB0E74.D67AAA40]

Sara D. Longley, Attorney

(Main) 360.378.4450 ext. 107

(Direct) 360.468.7230

Slongley at pnwtaxlaw.com<mailto:Slongley at pnwtaxlaw.com>

www.pnwtaxlaw.com<http://www.pnwtaxlaw.com/>



This email and any attachments may contain confidential and/or attorney-client privileged information. If you are not the intended recipient please immediately delete the email and notify the sender.
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