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<p class="MsoNormal">I think I get it: the title insurance companies use the term “succession tax” as a generic term and urge a broad interpretation to cover any and all taxes that might accrue by reason of transfer by death, whether they are styled as “estate”
or “inheritance” tax.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Dwight—thank you by the way!--notes the possibility that even though WA doesn’t have an inheritance tax, if the decedent was domiciled in a state that did have such a tax, the decedent’s WA real property be subject to that state’s estate
or inheritance tax.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">While I have difficulty imagining a circumstance where another state could unilaterally impose a lien on Washington real property to enforce their tax, I guess insurance companies prefer to expressly exclude as much as possible.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><span style="mso-ligatures:none">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none">Sayre Law Offices, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none">1417 31st Ave South<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none">Seattle WA 98144-3909<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none">206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:none"><a href="mailto:eric@sayrelawoffices.com"><span style="color:#0563C1">eric@sayrelawoffices.com</span></a><o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><b><span style="mso-ligatures:none">From:</span></b><span style="mso-ligatures:none"> Dwight Bickel <dwight@dwightbickel.com>
<br>
<b>Sent:</b> Monday, December 4, 2023 12:20 PM<br>
<b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> RE: Succession Tax, Inheritance Tax, Estate Tax<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-family:"Verdana",sans-serif">In typical practice, the referenced exception appears only upon a preliminary commitment, and the exception is not allowed by the proposed purchaser that is not an heir, nor allowed by a proposed
purchase-money mortgage lender, so it becomes a matter that the purchaser, or new lender’s escrow instructions will require to be removed from the proposed policy. The seller (or its heirs and agents) will be required to pay taxes that are due, or otherwise
convince the title company to assume the risk, so the exception is removed from the proposed policies. It is incredibly complicated for the title company to determine and to eliminate the risk of all possible succession taxes. That liability does not require
recorded claims of lien. Often the seller’s estate, the sellers’ heirs or even the Estate’s PR may be required to provide indemnity as a condition for the title company to assume that risk by removing that exception. It is probably not important to argue what
the exception phrasing may mean when only the proposed Insured has rights under the policy, and that exception is not going to appear on the policy [unless it is an heir who is the Insured, and often that exception can be removed for that person’s purchase-money
mortgage lender].<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Verdana",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Verdana",sans-serif">While we know that the policy is interpreted by Courts favoring the interpretation by the proposed Insured, the intent of the title companies is to broadly except from the proposed policy coverage
for any type of tax upon the Land that is due to the passing of the Title due to the death of a prior owner. In states with an Estate Tax, that exception would apply to the lien upon the Land due from the Decedent’s Estate pursuant to both Federal and State
tax laws. There are other taxes pursuant to statutes that the exception would apply to, such as DSHS rights to recover, even after the title of the Decedent expires due to joint tenancy or a life estate. Even “excise tax” due to the transfer caused by the
death of the owner would be excepted, but in WA there is an exemption that applies. In states with an inheritance tax, that exception would also apply to any tax claimed to be due from the successor heir. There are circumstances where inheritance taxes are
imposed upon Washington real property for its passing to an heir, imposed by other states where the decedent may have domiciled. The effect of such an exception would be that any subject assertion of a tax upon the purchaser due to the death of the prior owner
would be an expense that would not be reimbursed by the Covered Risks of the Policy.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Verdana",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal" style="background:white;vertical-align:baseline"><span style="font-size:14.5pt;font-family:"Open Sans",sans-serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">According to
</span><span style="color:black"><a href="https://www.merriam-webster.com/dictionary/succession">Succession Definition & Meaning - Merriam-Webster</a></span><span style="font-size:14.5pt;font-family:"Open Sans",sans-serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">:<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in;background:white;vertical-align:baseline">
<span class="letter"><b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#303336;border:none windowtext 1.0pt;padding:0in">1 a</span></b></span><strong><span style="font-size:14.5pt;font-family:"Calibri",sans-serif;color:#212529;border:none windowtext 1.0pt;padding:0in">: </span></strong><span class="dttext"><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in">the
order in which or the conditions under which one person after another <a href="https://www.merriam-webster.com/dictionary/succeeds"><span style="color:#0074CC">succeeds</span></a> to a property, dignity, title, or throne</span></span><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in;background:white;vertical-align:baseline">
<b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">…<o:p></o:p></span></b></p>
<p class="MsoNormal" style="margin-left:.5in;background:white;vertical-align:baseline">
<b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">2 a</span></b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">:
the act or process of following in order <b>: </b><a href="https://www.merriam-webster.com/dictionary/sequence"><b><span style="color:#0074CC;text-transform:uppercase;text-decoration:none">SEQUENCE</span></b></a></span><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in;background:white;vertical-align:baseline">
<b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#303336;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">b</span></b><b><span style="font-size:10.5pt;font-family:"Times New Roman",serif;color:#303336;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">(1)</span></b><b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">: </span></b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">the
act or process of one person's taking the place of another in the enjoyment of or liability for rights or duties or both</span><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in;background:white;vertical-align:baseline">
<b><span style="font-size:10.5pt;font-family:"Times New Roman",serif;color:#303336;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">(2)</span></b><b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">: </span></b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">the
act or process of a person's becoming beneficially entitled to a property or property interest of a deceased person</span><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in;background:white;vertical-align:baseline">
<b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;border:none windowtext 1.0pt;padding:0in;mso-ligatures:none">…</span></b><span style="font-size:14.5pt;font-family:"Times New Roman",serif;color:#212529;mso-ligatures:none"><o:p></o:p></span></p>
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<p class="MsoNormal" style="background:white"><span style="color:black;mso-ligatures:none"><o:p> </o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-family:"Verdana",sans-serif;color:#174E86;mso-ligatures:none">Dwight A. Bickel </span><span style="color:black;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-family:"Verdana",sans-serif;color:#174E86;mso-ligatures:none">Real Property Title Advisor </span><span style="color:black;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-family:"Verdana",sans-serif;color:#174E86;mso-ligatures:none">Washington Title Professional </span><span style="color:black;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-size:11.5pt;color:#201F1E;mso-ligatures:none"><a href="mailto:Dwight@dwightbickel.com"><span style="font-size:11.0pt;font-family:"Verdana",sans-serif;color:#174E86">Dwight@dwightbickel.com</span></a></span><span style="font-family:"Verdana",sans-serif;color:#174E86;mso-ligatures:none"> </span><span style="color:black;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-size:11.5pt;color:#201F1E;mso-ligatures:none"><a href="http://dwightbickel.com"><span style="font-size:11.0pt;font-family:"Verdana",sans-serif;color:#174E86">http://dwightbickel.com</span></a></span><span style="font-family:"Verdana",sans-serif;color:#174E86;mso-ligatures:none"> </span><span style="color:black;mso-ligatures:none"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-family:"Verdana",sans-serif;color:#174E86;mso-ligatures:none">206-484-1976 </span><span style="color:black;mso-ligatures:none"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Verdana",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="mso-ligatures:none">From:</span></b><span style="mso-ligatures:none"> Eric Nelsen<br>
<br>
<o:p></o:p></span></p>
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<p class="MsoNormal">But in real property transactions when an Estate is selling real property, I routinely see title companies refer to a “lien of succession tax.”
<b>Whattheheck is a succession tax?</b> <o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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