In the state of Washington, married couples can use a technique known as a community property agreement to avoid probate. A community property agreement states that, once the first spouse dies, all of their property converts to community property and then immediately transfers to the living spouse. Washington Law allows all marital property to pass to a surviving spouse without probate. If you think a community property agreement might be right for your circumstances, an experienced Washington estate planning attorney can help.

You Want To Leave Everything To Your Surviving Spouse

A community property agreement can be a good idea if both spouses in a relationship are absolutely certain that they want to leave all their property to their surviving spouse. Many people assume that their property will automatically transfer to their spouse if they pass on first, but in Washington state even if you live with your spouse, this is not necessarily the case without a community property agreement. A community property agreement is a contract that can cut a step out of the process for married couples who do want to leave all their assets to their surviving spouse. A community property agreement could be a possible, less expensive, alternative to something like a revocable living trust for some married couples. All estate planning questions are highly individualized, an experienced estate planning attorney can help you determine which path is best for your situation.

Community Property Agreements and Taxes

When one spouse passes on, and the community property agreement is invoked, the surviving spouse will has what is known as a “step up” in tax basis. When property is transferred through the community property agreement, the surviving spouse’s tax basis for the asset becomes the fair market value on the date of their spouse’s death. Like all questions related to estate planning and taxes this can become complicated and the effect will be highly dependent on individual circumstances. But, many times the net result of this is the community property agreement reduces the surviving spouse’s exposure to capital gains taxes and provides some tax savings.

Contact An Experienced Renton Estate Planning Attorney

Estate planning is necessary for everyone and it can be complicated. A community property agreement can be a valuable estate planning tool. However, it does have some drawbacks and it is not appropriate for all situations. If you are considering community property agreement, or have any general Washington state estate planning questions, contact Renton estate planning attorney Dan Kellogg today.