New Washington Law Allows for Transfer of Real Property at Death Without Probate
This article originally appeared in the August/September 2014 issue of Insight on Estate Planning.
A new law in Washington allows an individual to execute a deed during his or her lifetime that takes effect at death without the need for a probate proceeding. This law, called the Uniform Real Property Transfer on Death Act, became effective on June 12, 2014.
Under this new law, an individual may execute and record a transfer on death (TOD) deed that will transfer real property to one or more beneficiaries at the transferor’s death. This TOD deed must contain the essential elements and formalities of a properly recordable deed and must state that the transfer to the designated beneficiary is to occur at the transferor’s death. The deed must also be recorded prior to the transferor’s death in the public records office in the county in which the real property is located. The legal capacity required to make or revoke a TOD deed is the same as that required to execute a Will.
Beneficiaries of TOD deeds have no interest in the property until the TOD deed takes effect at the transferor’s death. Beneficiaries do not need to be notified of their pending interest during the transferor’s lifetime in order for the TOD deed to be effective. At the transferor’s death, the transferor’s interest in the property passes automatically to the beneficiary, subject to applicable taxes and all other interests in the property including liens, mortgages, and other encumbrances. Beneficiaries who wish to disclaim the interest must do so in writing within nine months of the death of the transferor. If the beneficiary dies before the transferor, the interest lapses.
The transferor may revoke the TOD deed at any time during life, even if the deed or another instrument states otherwise. Once the deed is recorded, the only effective ways to revoke it are to execute: (1) a new TOD deed that expressly revokes all or part of the earlier TOD deed or is inconsistent with the earlier TOD deed; (2) an instrument of revocation that expressly revokes the TOD deed; or (3) a lifetime deed that expressly revokes the TOD deed. To be effective any of these instruments must be signed by the original transferor, dated after the original TOD deed, and recorded in the county records of the county where the original TOD deed was recorded. If a TOD deed is made by more than one person, revocation by one transferor will not affect the deed as to the interest of another transferor.
Transferors who are “joint owners” of property or owners of community property should note there are specific rules for the transfer of property with more than one owner. If you would like to discuss whether a transfer on death deed is right for you, please contact a member of the Stokes Lawrence Estate Planning group.