When is a Nonprobate Asset Not a Nonprobate Asset? Part 2

Per E. Oscarsson, Edmonds Lawyer

As I described in a previous post, Washington probate and trust law generally defines a “nonprobate asset” as well as the types of assets that are not included within that definition (See here for previous post). However, the definition of “nonprobate asset” is not consistent for all purposes. RCW 11.07.010 provides, in part, that if a marriage or state registered domestic partnership is dissolved or invalidated, or a state registered domestic partnership is terminated, a provision made prior to that event that relates to the payment or transfer at death of the decedent’s interest in a nonprobate asset in favor of or granting an interest or power to the decedent’s former spouse or state registered domestic partner, is revoked.  The effect of the revocation is that the affected nonprobate asset passes as if the former spouse or former state registered domestic partner did not survive the decedent, having died at the time of entry of the decree of dissolution or declaration of invalidity or termination of the state registered domestic partnership.

For purposes of this statute, “nonprobate asset” is defined to mean only the following written instruments or arrangements other than the decedent’s Will:

1. A payable on death provision of a life insurance policy, employee benefit plan, annuity or similar contract, or individual retirement account, unless provided otherwise by controlling federal law;

2.  A payable on death, trust, or joint with right of survivorship bank account;

3. A trust of which the person is the grantor and that becomes effective or irrevocable only upon the person’s death;

4. Transfer on death beneficiary designations of a transfer on death or pay on death security, or joint tenancy or joint tenancy with right of survivorship designations of a security (if such designations are authorized under Washington law);

5. A transfer on death, pay on death, joint tenancy, or joint tenancy with right of survivorship brokerage account;

6. A transfer on death deed;

7. Unless otherwise specifically provided in the contract, a contract where payment or performance under that contract is affected by the death of the person; or

8. Unless otherwise specifically provided in the written instrument of transfer, a written instrument of transfer within the meaning of RCW 11.02.091(3), containing a provision for the nonprobate transfer of an asset at death.  This includes an insurance policy, an employment contract, a bond, a mortgage or deed of trust, a promissory note, a certified or uncertified security, an account agreement, a compensation plan, a pension plan, an individual retirement plan, an employee benefit plan, a joint tenancy, a community property agreement, a trust, a conveyance, a deed of gift, a contract, or another written instrument of a similar nature that would be effective if it did not contain a provision for a nonprobate transfer at death.

Some of the types of assets in this list that are nonprobate assets for purposes of dissolution or invalidation of a marriage or state registered domestic partnership are excluded from the general definition of nonprobate assets under probate and trust law.  This highlights the fact that context matters.  Without the context, use of the term “nonprobate assets” could be misleading. 

If you need assistance with your estate planning, contact Per Oscarsson or one of the other attorneys in Beresford Booth’s Estate Planning and Probate Group.

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