Taxes

While the issue of taxes is beyond the scope of this article, some facts remain central to most probates.

1. First, the personal representative should strongly consider obtaining expert advice from a certified professional accountant (CPA) experienced in estate probate work. A final federal return may be filed so that the IRS “closes” its records regarding the decedent. The personal representative will, also, want to consider if there are tax liabilities associated with the decedent from when the person was alive, including filed or unfiled returns.
2. In addition, the estate can be subject to estate taxes, or individual taxes for income.

  1. In Washington, an estate will, often, incur a tax liability on assets in excess of $2,193,000.00 (2021). Put another way, there is often no Washington state estate “death” tax liability on the first $2,193,000.00 worth of assets, but any value above this is, most likely, subject to a tax consequence.
  2. The federal estate ‘death’ tax rules are constantly changing. Exempted amounts are based on calculating the Net Estate value and may include an election to pass a decedent’s unused exemption to a surviving spouse.

Note: Again, the prudent personal representative will seek out the assistance of a qualified CPA.

Community vs. Separate property

Washington state is considered a “Community Property” state. While certain exceptions exist, under this system, assets acquired during a marriage are, generally, considered as belonging to both partners. Property brought to the marriage and kept separately is, generally, considered the separate property of that individual. In terms of probate and estate planning, the surviving spouse, generally, receives the decedent’s one-half interest in the community property. The decedent may, however, distribute separate property in the manner they prefer by way of their will. The competent personal representative will consult with a probate attorney to discuss these issues, especially in the case of an intestate estate.

The Estate Dispute Resolution Act (TEDRA)

  1. TEDRA is codified under RCW 11.96AA.
  2. An agreement entered into under TEDRA is a legally binding agreement and enforceable by the court.
  3. A TEDRA agreement can be as simple or complicated or as the situation warrants. For example, it can define the distribution of an entire estate or just describe the division of personal property items in a certain way.
  4. To be enforceable, the TEDRA agreement must be signed by all beneficiaries of the estate no matter the amount of the beneficiaries interests.
  5. Once signed by all parties, the TEDRA is filed with the court and is effective as a binding court order.

Note: The TEDRA statutory provisions also supply the means for beneficiaries and interested parties to an estate and/or a trust to bring an expedited law suit, in the case of an unresolvable, adversarial situation.

Will disputes

Washington law provides the means for interested parties to challenge a will.

  1. These statutes are codified under RCW 11.24.010.
  2. An interested party can file a petition containing objections to a will within four months of the will being registered with the court.
  3. The most common bases for a will challenge include questions of the competency of the decedent to make will, execution under restraint, fraud, undue influence, or duress.
  4. Other issues may involve how the will was executed and whether it would be considered valid under Washington will execution requirements.
  5. It is important to note that the burden of proof is on the individual challenging the will (the petitioner) and that costs may be assessed against an unsuccessful petition.

Note: There are many additional issues, relevant to probate, that could be discussed in this platform. Please feel free to submit suggestions to the authors for their consideration at:
probatewebsite@whiplawgroup.com