2026 Changes to Washington’s Probate Code

On June 11, 2026, several amendments to Washington's probate statutes will take effect. The changes were prompted by concerns over cases in which individuals unrelated to the decedent obtained appointment as estate administrators and mishandled estate assets for their own benefit. The Legislature’s response was to create additional safeguards designed to ensure that courts receive more information before appointing an administrator in an intestate estate and to prevent certain individuals from serving at all. The practical effect is that when you start a probate without a will, the petition you prepare and file will need more factual detail than before. RCW 11.28.110.

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Additional Information Required in Intestate Petitions

The petition must now provide more information regarding both the absence of a will and the identity of the decedent’s heirs. Among other things, the petition should now include:

• A description of the basis for the petitioner’s knowledge that no will exists.

• A description of the reasonable efforts undertaken to identify heirs.

• A statement that the petitioner is entitled to administer the estate under RCW 11.28.120 and is not disqualified from serving under RCW 11.36.010.

• A reasonably complete description of the probate assets and the petitioner’s investigation in locating assets.

These requirements effectively require petitioners to document the investigative steps they have taken before seeking appointment rather than simply making conclusory allegations. A sample Petition for Appointment of Administrator is located on the Documents pages of this website.

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Asset Disclosure and Bond Requirements

At first glance, the new statute appears to create different disclosure obligations regarding assets depending on who is seeking appointment. Third-party applicants, such as professional fiduciaries, must identify major probate assets, including real property, vehicles, and any asset exceeding $10,000. Surviving spouses and next of kin are not expressly required to provide the same level of detail.

In practice, however, that distinction may be less significant than it first appears.

The reason is that when there is no will, the court generally must consider whether a bond should be required and, if so, in what amount. Under RCW 11.28.185, a bond is typically required when there is no will unless the estate falls within one of a few narrow exceptions, such as certain situations involving a surviving spouse administering what is essentially a community-property estate.

The statute provides that the petition need not include detailed information regarding the value, location, provenance, or condition of each major probate asset except to the extent necessary for the court to determine an appropriate bond. But if bond is being considered, which it should be in most intestate estates, the court necessarily needs information regarding the nature and approximate value of estate assets.

For that reason, my recommendation is that practitioners continue to prepare intestate petitions with a reasonably complete description of all known probate assets, including:

• Real property;

• Motor vehicles;

• Financial accounts;

• Business interests;

• Personal property of significant value; and

• Any other probate asset exceeding $10,000.

Likewise, the petition should describe the reasonable efforts undertaken to identify both assets and liabilities of the estate. While the statutory language suggests that less detail may sometimes suffice, providing a more complete picture of the estate will better position the court to evaluate if a bond is needed and reduce the likelihood of questions, continuances, or requests for supplemental information.

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Expanded Categories of Disqualified Persons

The Legislature also expanded the categories of individuals who may not serve as personal representative and administrator. RCW 11.36.010.

In addition to the traditional disqualifications, which continue to apply to minors, persons of unsound mind, and persons convicted of a felony or a crime involving moral turpitude, the statute now disqualifies:

• Individuals whose letters have been revoked within the previous 24 months.

• Individuals who, within the previous three years, have been found by a court or administrative agency to have engaged in dishonesty or breached fiduciary duties.

• Certain persons seeking appointment who are principals, agents, or persons acting in concert with individuals or businesses that are likely to participate in the sale, purchase, repair, or transfer of a major probate asset.

This final category appears aimed directly at situations where a person obtaining appointment may have a financial interest in transactions involving estate property.

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Changes to Timelines for Appointments

The amendments to RCW 11.28.120 also added more time for the next of kin and the person named in the will to seek appointment. Previously, if the persons entitled to priority failed to petition for appointment within forty days after the decedent’s death, the court could appoint another suitable person to administer the estate. The statute now extends that period from forty days to ninety days. One point worth noting is that this ninety-day period is not a deadline for opening a probate. Washington probates can still be started long after a person’s death. Instead, the statute addresses who has priority to serve. A person who would otherwise have first priority for appointment, such as the individual named in a Will, a surviving spouse, or another heir, may lose that priority if no petition for appointment is filed within ninety days. The probate itself can still be opened, but another qualified person may be permitted to skip ahead of someone with higher priority.

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Unsworn Verifications of the Petition Still Appear Permissible

The amended statute continues to require that an intestate petition be “signed and verified” by the petitioner or the petitioner’s attorney, but it has added language that it must be verified by “oath.” Some practitioners may wonder whether this language now requires a sworn, notarized verification.

In my view, the answer is probably no.

RCW Chapter 5.50 generally permits an unsworn declaration made under penalty of perjury to be used in lieu of an oath, affidavit, verification, or similar sworn statement. Nothing in the 2026 probate amendments appears to change that rule. Therefore, practitioners will likely continue to be able to use declarations that comply with RCW Chapter 5.50 to verify intestate petitions.

Practitioners should be careful, however, not to confuse the verification of the petition with the separate oath executed by the personal representative upon appointment under RCW 11.28.170. RCW 5.50 contains an exception for oaths of office. The personal representative's oath, where they swear to faithfully perform the duties of office, is not a factual verification of a pleading. It is an oath undertaken as a condition of assuming the fiduciary office of personal representative. Therefore, the administrator’s oath should continue to be executed as a traditional sworn oath rather than as an unsworn declaration under penalty of perjury.

In short, while the petition itself may still be verified through an unsworn declaration under RCW Chapter 5.50, practitioners should continue using a formal oath for the personal representative’s oath of office unless and until the courts provide further guidance.

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New Post-Appointment Reporting Requirements (Full Intervention Probates Only)

The 2026 legislation also creates several new reporting requirements after appointment. However, practitioners should be careful not to assume that these requirements apply to every probate. These provisions were added to Chapter 11.76 RCW, which governs full intervention probate administrations. The overwhelming majority of Washington probates are administered with nonintervention powers under Chapter 11.68 RCW.

RCW 11.68.090(2)(b) expressly provides that a “personal representative with nonintervention powers has no duty to follow the procedures of RCW 11.76.010 through 11.76.080.” As a result, the following new reporting requirements appear directed primarily at full intervention probate administrations rather than nonintervention estates.

Notice Compliance Filing

Within 30 days after appointment, the personal representative must file a declaration confirming that notice was provided to all persons entitled to notice, and the steps undertaken to identify heirs.

Estate Account Filing

Within 30 days after opening an estate financial account, the personal representative must file information identifying the date the account was opened; the financial institution where the account is maintained; and all persons authorized as signatories on the account.

Estates Remaining Open More Than Two Years

The legislation also creates a mechanism allowing an interested party to seek court involvement when an estate remains open for an extended period. If an intervention estate remains open for more than two years, an interested party may petition the court for an order requiring the estate to be closed by a date certain.

Again, however, these new post-appointment reporting requirements were placed into the section of the probate code governing full intervention probates, and would therefore not apply to most Washington probates.

No, You Don’t Need a Living Trust...But Keep Reading

There’s a persistent myth out there, perpetuated by “experts” on the internet, radio, and TV, that everyone needs a revocable living trust (RLT). It’s a myth that frustrates me to no end, particularly when I’m approached by potential or former clients who have already made up their mind that they must have one!

The Problem with “Experts” and Generic Advice

These so-called experts hawking RLTs often operate outside the state of Washington, or worse, they’re within the state but trying to sell expensive legal products to clients who don’t need them. Why? Because these products are lucrative for the attorneys or companies selling them.

Sure, revocable living trusts can make sense for some people. For example, families in California may need a RLT where the probate system is often expensive and difficult. But let me be clear: the number of people in Washington who truly benefit from a RLT is a very small minority. In most cases, these trusts are overkill. You don’t need to spend thousands of dollars on a legal tool that might end up creating more problems than it solves.

The Court Agrees: Misleading Clients is Wrong

This isn’t just my professional opinion. In CLA Estate Services, Inc. v. State of Washington, the Washington Attorney General went after a company that was systematically misleading seniors into believing that RLTs were a superior estate planning method in Washington and was using insurance agents to pitch high-commission annuities as part of the estate plan. The court ruled this was deceptive, noting that the company “misrepresents Washington law, the Washington probate process, and the relative benefits of revocable living trusts in Washington.” It ordered the company to pay $14.5 million in damages: AG Ferguson wins historic $14.5M after trial on “trust mill” scheme | Washington State.

This is a critical point: Washington’s probate process is not the same as that in other states. It’s relatively simple and inexpensive here. For most people, a well-drafted will, paired with thoughtful planning, is more than sufficient.

The Bigger Issue: Disregarding Experts

We’re in a strange time when experts are increasingly disregarded. People assume they can “do their own research” on everything, including estate planning, and suddenly they’re qualified to tell professionals—such as lawyers who practice estate law all day, every day—what’s best for them. It’s like me walking into a Boeing plant and telling an engineer how to build a plane. Couldn’t be that hard, right? They trust their own “research” or a radio personality or the TV pitchman more than their local attorney who’s practiced in this area for decades.

The Real Cost of Bad Advice

Yes, there are lawyers who will gladly take your money and sell you a RLT you don’t need. And yes, when Suze Orman or another celebrity “expert” says you need a RLT, it can feel like gospel. But here’s the truth: these decisions often result in clients spending two, three, or even ten times what they would have needed to spend for effective estate planning.

If you’re ready to pay that premium, fine. But understand that you’re not getting a better result just because you paid more. You’re getting a product that’s designed to enrich the seller, not necessarily to meet your actual needs. Most of the time, you are actually getting a far inferior product that will frustrate and confuse you later.

The Value of Tailored Advice

This is not to say all trusts are bad. Far from it! For the right person, in the right circumstances, a RLT may be an excellent tool. And other types of trusts—children’s trusts, tax shelter trusts, for example—are excellent and part of any estate planner’s tool kit. But deciding whether you need one should be based on your specific situation, not on advice from a radio pitchman.

As an attorney who has practiced for over 25 years, my goal has always been to provide practical, cost-effective solutions tailored to my client’s needs. I’ve written balanced, practical articles on the pros and cons of living trusts. But honestly, I’m done with that. I’m tired of battling misinformation and fighting to convince people that the advice of someone who works in this area every day might actually be worth listening to. If you want a revocable living trust, great! Just google “revocable living trust” and the name of your city, and you’ll find a reliable trust mill in your area.

Final Thoughts: Choose Carefully

If you want to follow bad advice, no one can stop you. But if you value expert guidance and a realistic understanding of your options, seek out an experienced local attorney based on referrals from reliable and smart friends and family. Don’t fall victim to generic advice designed to scare you into overspending. Estate planning isn’t one-size-fits-all, and it’s not a job for amateurs.

2021 Legislative Changes to the Washington Probate Code

General Powers of a Personal Representative

A personal representative with nonintervention powers has always had broad powers to manage an estate without court supervision. This new legislation confirms this, but provides an updated outline of those powers. Those powers include the authority to sell property, borrow money, honor the decedent’s contracts, determine who is entitled to a portion of the estate, and make pro rata and nonpro rata distributions from the estate without court approval. The new law also confirms the obligations of a personal representative, including the duty to act in good faith, honestly, consistent with the terms of the will, and in the interests of the beneficiaries of the estate. S.B. 5132, § 4010.

Power of a Personal Representative to Interpret and Construe a Will

In Estate of Rathbone, 190 Wn.2d 332, 412 P.3d 1283 (2018), the Washington Supreme Court appeared to give personal representatives with nonintervention powers virtually unlimited power to interpret and construe a will. This new legislation places limits on this power and defines the procedures for challenging a personal representative’s interpretation or construction of a will. Under S.B. 5132, any party can file a petition under the Trust and Estate Dispute Resolution Act (TEDRA), Ch. 11.96A RCW, to ask the court to resolve disputes over an ambiguous provision in a will. However, the personal representative’s interpretation is presumed to be correct. This presumption can be rebutted with evidence that the personal representative’s interpretation or construction is not consistent with the testator’s intent. S.B. 5132, § 4007.

Power of a Personal Representative to Bring a Request for Instructions

In Rathbone, the Washington Supreme Court also observed that after a trial court granted nonintervention powers to a personal representative, the court’s authority over the estate’s administration was limited. When these powers are granted to the personal representative, a trial court would have no authority to rule on matters that weren’t otherwise authorized by a separate statute. Rathbone, 190 Wn.2d at 339. This new legislation makes clear that a court may rule on motions brought by the personal representative related to the estate, and the personal representative does not waive nonintervention powers by making such a request. S.B. 5132, § 4017. This legislation, however, only references the personal representative’s power to bring such motions. Therefore, it’s unclear whether any other party can bring such “requests for instructions” in a probate case, or whether they would instead need to file a petition under TEDRA to resolve questions related to the estate.

Creditor Claims by a Personal Representative

When a personal representative has a creditor claim against the estate, current law requires the filing of a petition under TEDRA. S.B. 5132 removes the language requiring the filing of a petition. Now, a personal representative’s creditor claim must be “addressed, resolved, and settled under the procedures provided under [TEDRA].” S.B. 5132, § 4001. This would allow the personal representative to reach a nonjudicial agreement with the other parties interested in the estate, thereby avoiding the time and expense related to filing a petition and obtaining judicial approval of the creditor claim.

Removing a Personal Representative

The process for removing a personal representative can be confusing. The new legislation removes the sometimes ignored process of first obtaining a show cause-like order requiring the personal representative to appear in court to answer why he or she should not be removed (also known as a “citation”). Under this new legislation, a petitioner must file a petition under TEDRA that is verified or supported by an affidavit showing facts that support the claim for removal. The new statute lays out the grounds that would support a removal, which includes many of the reasons you’d expect, such as breach of fiduciary duty, exceeding the personal representative’s authority, and violating a law affecting the estate, among others. The law also allows a court to fashion an equitable remedy, short of removal, including limiting the personal representative’s powers. S.B. 5132, § 4009.

This change brings with it something practitioners will need to juggle. Under the citation procedure, the removal request would be brought under the probate case number, so there was never an issue of where the order removing the personal representative would be filed. But TEDRA petitions must be filed under a new case number (see RCW 11.96A.090(2)), and this new legislation makes no exception for TEDRA petitions brought to remove a personal representative. Therefore, practitioners should ensure that any order that is entered removing or restricting a personal representative’s powers is filed under both the TEDRA case number and the probate case number. 

Closing the Probate

When closing an estate, most personal representatives use a Declaration of Completion, which is authorized by RCW 11.68.110. When this method is used, this new legislation changes how a party objects to the estate closure, what the party can object to, and the notice that the personal representative must give to heirs and beneficiaries. Under existing law, if an heir or beneficiary is unhappy about the proposed closing of the estate, they had few options: they can file a petition to remove the personal representative (see Rathbone, 190 Wn.2d at 342), a right that is not mentioned in the statutory Notice of Filing of the Declaration of Completion; or they can follow the rules for objecting that are provided in the Notice of Filing. RCW 11.68.110. But if they follow this latter process, their objection was limited to objecting to the fees paid to professionals and/or demanding an accounting. Rathbone, 190 Wn.2d at 340.

The new legislation eliminates this confusion by creating one process for objecting to the closing of the probate: Any heir or beneficiary can file a petition under TEDRA within 30 days of the filing of the Declaration of Completion. That petition can challenge the fees paid to professionals, demand that the personal representative close the estate under RCW 11.68.100 (i.e., with an accounting), and/or request other relief to defend the rights of the heir or beneficiary. The statutory language that must be included in the Notice of Filing has been changed to reference these rights and this new process for objecting. S.B. 5132, §§ 4014-15.

The probate code also allows a personal representative to close and distribute the estate with a Declaration of Completion while holding back up to $3,000 to settle any final tax liabilities. RCW 11.68.114; S.B. 5132, § 4016. This has not changed, nor has the obligation to file with the court and mail to the heirs and beneficiaries copies of the checks or receipts showing how the reserves were distributed. But now the personal representative must give more extensive notice of the right to petition the court for an accounting of how the reserves were used and/or a judicial review of how the reserves were distributed. See S.B. 5132, § 4016.

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Electronic Wills are coming to Washington

The Washington Uniform Electronic Wills Act takes effect on January 1, 2022, allowing Washington residents to digitally execute wills for the first time in our state's history. Under previous Washington law, a Washington will had to be a paper document signed by the testator in the physical presence of two witnesses. As of January 2022, however, Washington law will allow wills to be executed electronically, thereby adding wills to the list of other legal and commercial transactions that may be carried out electronically. However, some of the rules can be confusing, so practitioners should be very careful.

Executing a Valid Electronic Will Under the New Act 

Currently a valid Washington will must be on paper. However, when this new law becomes effective next year, wills can instead be stored in an electronic medium, as long as it is readable as text and it is retrievable. Specifically, the law defines the document as “information that is inscribed on a tangible medium or that is stored in electronic or other medium and is retrievable in perceivable form.” In other words, the will can be in a Word or PDF format, or any other type of format that meets the definition in the law.

The electronic will still must be signed by the testator and two witnesses. But to “sign” an electronic will, the law doesn’t require the testator and witnesses to physically sign in the traditional way we sign wills today. Instead, the law allows the parties to “affix to or logically associate with” the will an “electronic symbol, an electronic sound, or process” with an “intent to authenticate” the will. This would include the more traditional ways we have grown accustomed to electronically signing documents, such as through DocuSign or by simply typing a name to the end of a document. But the law is written broadly enough with the hopes of not excluding new technological developments.

Finally, the witnesses and testator need not be in each other’s physical presence to properly execute an electronic will. Instead, they can be in “electronic presence” of each other, which is defined as when the witnesses and testator are in different locations, but are communicating in real time as if they were physically present with each other (e.g., a video call). Importantly, this portion of the law applies to both electronic and non-electronic wills. So now even with traditional will signings, the testator and witnesses can be in different locations. Also, the law now allows wills – both paper and electronic – to be executed in counterparts, which together will be considered a single document.

Self-Proving the Electronic Will

While executing a will properly is important, the process of self-proving a will is crucial. A “self-proving” will is a will for which the witnesses are not required to testify in court to the will’s validity later when the will is admitted to probate. A self-proving will is highly desirable, as it can be a significant burden to identify, locate, and obtain statements from witnesses when a will is admitted to probate many years later.

Fortunately, the new electronic wills law makes this easy. It provides specific language to include in an electronic will that satisfies the self-proving requirement. Traditionally, the signatures of the witnesses would be notarized, and the new law still allows this, but also contains a statement by the testator that is notarized. However, the law also allows you to ignore the notary requirement altogether and instead use Chapter 5.50 RCW, which allows for the use of unsworn declarations as long as you use the proper language. But again, the law makes this easy and provides specific language that satisfies the law’s requirements for unsworn statements.  

Custodian Requirement

The “qualified custodian” requirement of the new law, however, may be the most significant challenge. After an electronic will is signed by the testator and witnesses, the will must be maintained by a qualified custodian. This can include any person over the age of 18 who is a resident of the state of Washington at the time of the execution of the will. It can also include certain trust companies, nonprofit corporations, will repositories, and professional service organizations, such as law firms. It cannot include minors, persons of unsounds mind, felons, or any person interested in the testator’s estate, including any heir or beneficiary.

The law requires that this custodian maintain custody of the electronic will at all times after the will signing. If the qualified custodian has not maintained custody of the electronic will for all times leading up to when the will is admitted to probate, then the will is treated as being lost and destroyed. In such cases it can be admitted only if a party provides sufficient proof that the will represents the accurate will of the decedent. This requirement may present the biggest risk for the enforcement of an electronic will.

Are Electronic Wills the Future?

An electronic will can be an important option for a client cloistered in a hospital room or care facility during a pandemic. But beyond such unique circumstances, an electronic will should probably be used sparingly. A major question with the adoption of electronic wills in Washington will be how easy, or difficult, it will be for individuals to find a qualified custodian to maintain the will after it is signed. If the local courts adopt a streamlined way of storing and updating electronic wills, then perhaps the courts will provide a simple option for custodianship of the wills. The same might be true if qualifying law firms or individuals fill this role without hesitation. What seems clear, however, is that, accelerated by COVID-19, more and more facets of daily life are moving to electronic form. If these trends continue, then electronic wills may likely become more commonplace in Washington State.

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Estate Planning for the 99%

On May 14, 2021, the King County Bar Association will be holding its popular, annual estate planning seminar on “Estate Planning for the 99%.” Due to Covid, last year’s seminar was cancelled. This year, it will be held via webcast. The event will have many experienced estate planning attorneys speaking on a wide range of topics, including taxes, community property issues, powers of attorney, and drafting wills and trusts. I will be speaking on the subject of planning outside of a will with nonprobate assets. You can sign up at the King County Bar Association’s website.

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Careers with King County Probates

The probate and estate planning department of the Curran Law Firm, which created and maintains kingcountyprobates.com, is looking to add an associate attorney who will assist the department and its clients in all aspects of estate planning and probate administration. Minimum requirements include a passion for helping others, a sense of curiosity, a commitment to the highest quality work product, and a continual desire to learn. Excellent writing skills and the ability to analyze complex legal issues, as demonstrated by good law school grades, is required. Experience in estate planning and probate law is not required, but an eagerness to learn and be part of a supportive team is. To learn more about this opportunity, send your resume and writing sample to chorner@curranfirm.com.

Zoom is Coming to Ex Parte in 2021

The King County Ex Parte and Probate Department has been using and experimenting with Zoom virtual hearings for a few months. But starting January 11, 2021, it will be moving its daily 10:30 probate calendar from telephone hearings to Zoom exclusively. You can still call in and use only your telephone, but this is discouraged and should be used only by those lacking the ability to access the required technology. Attorneys will be expected to use Zoom.

Below is information and tips that also appear on the Initial Hearing page of this website. Other resources include the Ex Parte and Probate Department website and the Note for Hearing pleading that the Probate Department staff prepared.

How do I get Zoom?

• Joining by Computer or Smartphone. Zoom hearings can be accessed through the internet, the Zoom application, landline, or mobile phone, as well as with a H.323 or SIP device. You can also download the Zoom App to your smartphone or device. To download the Zoom mobile application, visit the Zoom website at https://zoom.us/download.

How do I log into a court hearing?

• Go to Zoom. Go to https://zoom.us/. Once you are on the Zoom site, click the “Join a meeting” option, or use this link https://zoom.us/join.

• Enter the Meeting ID for the King County Superior Court Ex Parte Department. Then enter the Meeting ID (955 8948 6575) and click “Join.” Once you have joined, you will enter the virtual waiting room. When you enter the waiting room, you will see a list of cases that are scheduled to be heard on the 10:30 calendar, along with the courtroom where each case will be heard. Find your case and the proper courtroom. Currently, probate matters on the 10:30 calendar are heard in three courtrooms:

  • Courtroom 1J at the Maleng Regional Justice Center (MRJC) in Kent,

  • Room W-325 (courtroom 2) at the King County Courthouse (KCCH) in Seattle, and

  • Room W-325 (courtroom 3) at the King County Courthouse (KCCH) in Seattle.

• Select the Proper Courtroom. You will find a list of courtrooms in the “Breakout Rooms” options in the meeting controls (look for the waffle shaped icon on the bottom of the screen; if you can’t find it, be sure that you have the most recent Zoom application downloaded onto your computer). Click “Join” next to the virtual courtroom you wish to enter, then confirm by clicking “Join” again. If you do not know which courtroom you need to be in, there is usually a court employee in the virtual waiting room who can help.

How should I conduct myself at the Hearing?

Even though you are appearing by Zoom, maintaining appropriate courtroom etiquette is still very important. The judicial officers will expect you to treat this virtual forum like any regular courtroom. Here are some tips to make the experience a positive one for everyone in the courtroom, and to prevent getting sideways with the court commissioner.

• Arrive on time. You should familiarize yourself with the Zoom platform before the hearing to avoid any last minute problems. Then you should log in at least 10 minutes before the hearing.

• Dress appropriately. Attorneys should be dressed in courtroom attire. If you are not an attorney, you should dress as close to business attire as you are able. Do not wear a hat. Do not chew gum.

• Keep outside sounds to a minimum. Mute your microphone unless your hearing is in progress. Choose a room where your children, pets, or others are less likely to intrude.

• Avoid distractions. Remember that when your camera is on, all the court participants can see you. So be as discrete as you would in a normal courtroom as you come and go. You should consider turning off your camera if your hearing is not being held, and turn it on when your case is called. This will reduce the distraction to the attorneys and parties whose case is being heard.

• Be courteous. It should be obvious, but you should be courteous to all participants in the court hearing. You should avoid physical or facial displays that would not be acceptable in a regular courtroom, including sighing, laughing, and generally objectionable behavior.

• Include your name on the Zoom screen. The hearing should run more smoothly if your Zoom screen includes your name. You can rename the screen by right clicking on the screen and selecting “rename.”

• Do not record any court hearings. The court records all proceedings. If you need a copy, you can order a copy by contacting the clerk’s office.

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Changes in Estate Planning with Retirement Plans: The SECURE Act

Since the recession in the late 2000s, many clients have seen a dramatic increase in the value of their retirement accounts – often becoming the largest asset in their estate. Due to the tax-deferred nature of most accounts, ensuring retirement assets are properly considered in a client’s estate plan is essential. While these assets generally pass outside of probate and are not controlled by a client’s Will, clients often incorporate their retirement assets into their estate plan by designating a trust for their spouse or children as beneficiary. Recent changes to the law have complicated and, unfortunately, limited the tax benefits previously associated with retirement accounts.

Basics of Retirement Accounts

In general, retirement accounts, such as a 401(k), 403(b), or Individual Retirement Account (IRA) allow the employee (the “Participant”) to contribute pre-tax dollars to the account prior to reaching a certain age (known as the “Required Beginning Date”). After reaching that age, the Participant must begin taking “required minimum distributions” (“RMDs”) from the account. The RMDs are based on the Participant’s life expectancy as calculated by IRS regulations: the first RMD is comparatively small (when life expectancy is greater), but grows each year. When the Participant passes away, the account is left to his or her designated beneficiaries.

Changes to Inherited Retirement Accounts

Before 2020, after the death of the Participant and regardless of who the beneficiary was, the RMDs were based on the beneficiary’s life expectancy (with some exceptions applicable to spouses that are outside the scope of this blog post). For example, assume Participant X died in 2019 leaving their IRA 50% to Child Y (age 22), and 50% to child Z (age 19). Child Y’s RMDs would be based on a life expectancy of approximately 61 years, and Child Z’s RMDs would be based on a life expectancy of 64 years. This became known as the “Stretch IRA,” because it allowed the beneficiary to stretch the tax benefits over decades.

Unfortunately, the Stretch IRA as we know it has all but disappeared. On January 1, 2020, the Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”) became effective, changing the rules for distributions from retirement accounts left to non-spouse beneficiaries. Now, with narrow exceptions beyond the scope of this blog post, all retirement accounts must be fully distributed within ten years of the Participant’s death.

Comparing Old Versus New

To illustrate the impact of the SECURE Act on accounts left to children, assume Participant X leaves their IRA to Children Y and Z. Now assume X dies in 2020 with an IRA worth $1 million. Under the old rules, the RMDs for the first ten years would be as follows – assuming a 6% rate of return:

The RMDs increase each year, but are relatively small and allow the account to continue growing in a tax-deferred state for many more years or decades. In contrast, the SECURE Act requires that the entire account balance be withdrawn by December 31st of the 10th year following the X’s death. At today’s income tax rates, over $250,000 would be due on the withdrawal.

Planning Strategies

Often, clients leave retirement benefits to a trust for the benefit of their spouse and/or children rather than designating the beneficiaries directly. A common plan involves holding the assets in trust until the beneficiary reaches a certain age while allowing the trustee to make distributions in the interim for specified purposes (such as education, assistance with the purchase of a home, etc.) to avoid children inheriting significant wealth at a young age. The trust can provide control over distributions, protection from creditors, ensure the assets are invested and spent wisely, and allow the trustee to minimize tax exposure due to the SECURE Act’s 10-year payout requirement.

As retirement accounts continue to grow, they often become clients’ largest asset. A comprehensive estate plan involves careful consideration of and planning for retirement accounts. Whether you are in your first job or are near or at retirement age, I recommend consulting with an attorney to discuss these issues.

15th Annual Probate Administration Seminar

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On November 1, 2019, I will be speaking again at the King County Bar Association’s annual seminar on probate administration. The Bar Association describes it as a “comprehensive course [that] covers what you need to know from opening a probate to closing a probate and everything in between.” I will be speaking on how to open a probate, alternatives to probate, and identifying and administering nonprobate assets. The speakers include many experienced probate attorneys and the agenda includes many issues that arise when advising probate clients. Lawyers who are interested in attending can register at the King County Bar Association website.

Managing Firearms in an Estate

The possession, transfer and sale of firearms and other weapons create a special set of risks for a personal representative. Unlike typical assets, such as ordinary personal belongings and financial assets, firearms can create physical risk for the personal representative, beneficiaries and others. In addition, state and federal laws impose rules that must be followed to avoid potential civil and criminal penalties. This article is intended to provide an overview of the most important rules that a personal representative should follow when handling firearms, along with some general recommendations on how to handle issues involving firearms owned by an estate.

Secure the Firearm

The first responsibility of any personal representative is to secure any weapons that the decedent might have left. Under Washington law, a person can be subject to a felony or misdemeanor for failing to properly secure a firearm that is used by a certain class of people in a crime or if the weapon is discharged. RCW 9.41.360. A firearm is properly secured if it is held in a secure gun storage location or secured with a trigger lock or similar device. RCW 9.41.360. A secure gun storage includes a locked box, gun safe, or other secure, locked storage space that is designed to prevent unauthorized use or discharge of a firearm. The firearm should also be unloaded.

Identify the Firearm

The personal representative should then identify the type of weapons that the decedent left. The state and federal rules applicable to weapons differ depending on the type of firearm involved.

Pistols

Under Washington law, pistols are set apart from other weapons. Pistols are defined as “any firearm with a barrel less than sixteen inches in length, or is designed to be held and fired by the use of a single hand.” RCW 9.41.010. If the personal representative left a pistol, the personal representative must transfer the weapon within 60 days of coming into possession of the weapon. If that cannot or does not happen, the personal representative is supposed to notify the Washington State Department of Licensing to inform the department that he/she has taken possession of the pistol and intends to retain possession in compliance with state and federal law until such time as it is disposed of. RCW 9.41.113(4)(h)(ii). Typically, sixty days is too early to make distributions from an estate, given the four-month period for challenging a will. But if the personal representative believes that there is not likely to be a dispute over the weapon, there may be little risk in distributing firearms before this four-month will contest period lapses, assuming there is no significant value associated with the particular firearm. The personal representative should use a local, federally licensed firearms dealer to facilitate the sale or transfer of the pistol. The dealer will conduct any required background checks. The dealer will likely charge a fee for the services.

National Firearm Act (NFA) Firearms

The National Firearms Act (NFA) regulates several types of unique firearms: machine guns, short-barreled shotguns or short-barreled rifles, silencers, “destructive devices” (grenades, bombs, missiles), and “any other weapon” (unique weapons or devices that can be concealed on the person from which a shot can be discharged by the energy of an explosive). Generally, a typical rifle, shotgun, and pistol are not regulated by the National Firearms Act. The National Firearms Act requires NFA Firearms to be registered. To determine if an NFA Firearm is registered, the personal representative should contact a local, federally licensed gun dealer, provide the dealer with the gun’s serial number, and ask it to run a serial number search. Possession of an unregistered NFA Firearm is a crime. If the personal representative discovers that the decedent had an unregistered NFA Firearm, the personal representative should contact a local ATF office immediately.  

To transfer or sell an NFA Firearm, the personal representative should use a local, federally licensed firearms dealer to help facilitate the transfer. The dealer will conduct any required background checks, and will likely charge a fee for the service. The beneficiary or buyer will need to pass an extensive background check with the ATF. Also, the transfer of an NFA Firearm may be subject to a $200 tax.

Other Firearms

If the decedent had other types of firearms (e.g., a typical rifle or shotgun), the state and federal rules regarding pistols and NFA Firearms do not apply. Nevertheless, the personal representative should act prudently and carefully. Securing the firearm is essential. Also, the personal representative may choose to have a licensed dealer facilitate any sale or transfer and run a background check to ensure that the weapon is not transferred to a person ineligible to have a firearm.

Disclaimer

The state and federal rules governing firearms are complex and far from clear. This article is not intended to address all issues related to the sale or transfer of firearms from an estate. If other issues arise, you should contact a local, licensed dealer or the local ATF field office for further information. For further reading on this issue, the ATF issued a letter on the transfer of firearms from an estate, which was last updated in 2006.

Photo by seth schulte on Unsplash

Beware of the Use of QDROs as an Estate Planning Tool

There appears to be a movement afoot to add qualified domestic relations orders (QDROs) as a basic estate planning tool. Admittedly, the use of QDROs could be useful in a few estate planning contexts, such as when a client wants to delay the age deadline for taking required minimum distributions by moving funds to a younger spouse, or when a client wants to remove funds from one spouse’s estate for Medicaid planning purposes. But is it legal? Clients and practitioners should tread very carefully.

For those unfamiliar with QDROs, these are court or administrative orders, decrees, or judgments issued in the context of domestic relations matters, such as divorces, legal separations, or child support cases. These orders require the administrator of a qualified retirement plan (e.g., a 401k) to assign a portion of the plan to another person. This is very useful, for example, at the end of a marriage when assets need to be divided. Ordinarily, the law that governs qualified retirement plans, known as the Employee Retirement Income Security Act (ERISA), prohibits a person from assigning his or her rights in a plan to another person. An important exception is for QDROs.

However, ERISA demands that QDROs meet certain requirements. Chief among these is that the order be entered pursuant to a state’s domestic relations law. See 26 U.S.C. § 414(p)(I)(B)(ii) (“The term ‘domestic relations order’ means any judgment, decree, or order … which … is made pursuant to a State domestic relations law….”). Absent an order issued under Washington’s domestic relations law in Chapter 26 RCW, it’s unclear how a QDRO would meet this important requirement.

Washington has a comprehensive set of statutes governing disputes and issues involving trusts and estates referred to as the Trust and Estate Dispute Resolution Act (TEDRA). Chapter 11.96A RCW. This chapter of Washington’s probate code allows parties interested in an estate or trust to enter into agreements that resolve issues and disputes between them. TEDRA is broad enough to capture all matters “with respect to any … property interest passing at death.” RCW 11.96A.030(2)(a). The agreements reached under this law do not require a court’s approval. Nevertheless, the agreements can be filed with the court and have the effect of a court order. See RCW 11.96A.230(2). Such agreements, however, are not domestic relations orders. They are entered pursuant to Washington’s probate code, not Washington’s domestic relations law. Therefore, such orders would not appear to meet the definition of a QDRO under ERISA.

Until this issue is resolved, clients and practitioner should be very careful. Questionable tax avoidance and mitigation schemes have a way of spreading for a while only to be crushed after a few years by the IRS. The net result is often financial harm to average people who have limited resources to absorb the blow. The use of QDROs in estate planning may be another variation on this theme.

Estate Planning for Everyone - at KCTS9

On November 2, 2018, I will be speaking at the KCTS9 studios in lower Queen Anne on general estate planning. This presentation is geared for the public, and will address general estate planning topics, such as wills and trusts, and the importance of beneficiary designations, powers of attorney and healthcare directives. I’ll talk about five of the most common myths that I hear from clients. If you are interested in attending, contact Sherry Larsen-Holmes at 206-443-6730 or slarsen-holmes@kcts9.org. My slide presentation can be found at Prezi.com.

14th Annual Probate Administration Seminar

On November 1, 2018, I will be speaking at the King County Bar Association’s annual seminar on probate administration. The Bar Association describes it as a “comprehensive course [that] covers what you need to know from opening a probate to closing a probate and everything in between.” I will be speaking on how to open a probate, alternatives to probate, and identifying and administering nonprobate assets. The speakers include many experienced probate attorneys and the agenda includes many issues that arise when advising probate clients. Lawyers who are interested in attending can register at the King County Bar Association website.

Photo by Joakim Honkasalo on Unsplash

Strategies for Keeping Your Home Out of Probate

Clients sometimes ask me whether there is an advantage to placing their children, friend or another person on the title to their home to avoid probate. While this could help avoid probate, it comes with significant risks and there are different methods to avoid probate if a person’s home is the only reason a probate may be required.

It is important to remember that probate in Washington is not as bad as most people think. Washington has a relatively efficient probate system that provides a helpful court-approved structure, through which fiduciaries are protected from future creditor claims or allegations of improper distributions. At the conclusion of a properly administered probate, family members are able to feel comfortable that a loved one’s final wishes have been met and the executor will not likely face any future legal liability regarding the administration of estate.

If, however, a person’s home would be the only asset necessitating a probate, placing an heir’s name on title may avoid the need for a probate upon the owner’s death. A traditional method for transferring real property (i.e., land or a home) upon death is to add another person to the title as a “joint tenant with right of survivorship.” If this is done properly, the ownership of the property immediately vests in the co-tenant upon the death of one of the other owners. When this type of title is executed, the joint owners own an equal interest in the property. This is different than when the owners are designated as “tenants in common.” As tenants in common, each owner’s interest in the property is proportionate to their contribution to the property.

A property owner, however, should use extreme caution before adding another person as a joint owner with right of survivorship. The original property owner may not reverse this change without the consent of the new owner. The property cannot be sold without the consent of the new owner, or without going through a potentially costly legal action. Such a transfer would also likely be considered a gift for tax purposes and for future eligibility for Medicaid long-term care assistance. Also, if the new owner has any judgments against him or her, the judgment will likely attach to the property.

Fortunately, in 2014, Washington adopted a new type of deed that avoids many of the drawbacks of the joint tenancy deed. It is called a “Transfer on Death Deed” (also known as a beneficiary deed), and is authorized by Chapter 64.80 RCW. The deed has no effect on title during the owner’s lifetime. It conveys the parcel of real property to the beneficiary named in the deed at the moment the owner passes away, thereby avoiding probate at least as to that property. During the owner’s life, the beneficiary has no rights to the property and his or her liabilities can’t attach to it. This type of deed is almost always more beneficial to the homeowner than a deed creating joint tenancy.

Whether you are considering a deed creating joint tenancy or a beneficiary deed, I recommend that you consult with an attorney who can more fully discuss the pros and cons of the decision with you, as well as prepare the deed properly if you decide to go that route. 

Nonprobate Assets: An Essential Component to Review in Any Estate Plan

For lawyers advising clients regarding their estate plan, understanding the client’s full financial picture is vital in providing sound estate planning advice. An attorney’s guidance to a client is incomplete without a discussion and review of nonprobate assets and how these assets are titled or designated. Even though a client may execute a will giving his or her entire estate to a person or class of persons, that’s often not the full story. The client will likely have some assets that do not pass through the will. Actually, for some clients, the will might pass only a small fraction of a client’s estate. Therefore, ignoring a client's nonprobate assets or paying little attention to them could be a big mistake.

The proper use of nonprobate assets can have many advantages. Typically, nonprobate assets can be accessed quickly after a person dies, often with only an original death certificate. This can make liquid assets available quickly for certain final expenses of the decedent. Also, in the right circumstances, a person’s entire estate could be designated to pass through nonprobate assets, possibly making a probate and its costs unnecessary.

On the other hand, the improper use of nonprobate assets can lead to problems. Establishing a joint account with another person, merely for the convenience of giving that person the ability to pay bills, can lead to disagreements later when the full balance of the account passes to that person. Improper beneficiary designations of IRAs and other retirement plans can lead to negative tax consequences. Inconsistent designations, such as through the use of a community property agreement and joint tenancy, can lead to confusion and possible litigation upon the death of a client. Careful planning, review of all assets, and a thorough understanding of these assets is essential to doing estate planning right.

I will be speaking on this subject on April 19, 2018, at a continuing legal education seminar sponsored by the King County Bar Association at the Washington Convention Center. The seminar is titled "Personal Estate Planning for the 99%," and will have many experienced estate planning attorneys speaking on a wide range of topics. If you cannot attend, you can download my written materials on Planning Considerations for Nonprobate Assets and find my slides here.  

Mutual Wills and Estate Planning: What Spouses Should Know

When completing estate planning, many spouses execute wills that are mirror images of each other. For example, both wills say that upon the death of one spouse, everything goes to the surviving spouse. And then, upon the second death, their wills give everything to the same set of children or to the same set of people or charities. Such wills are called “reciprocal wills.” With reciprocal wills, the surviving spouse is free to change his or her will, gift assets to others, and name beneficiaries as he or she sees fit. In other words, the surviving spouse receives everything and is then free to do whatever he or she wants with it.

If the wills are “mutual wills,” however, the surviving spouse doesn’t have the same freedoms. With mutual wills, the spouses agree that the surviving spouse will not change his or her will after the death of the first spouse. Mutual wills are not as common as reciprocal wills, especially in situations where the two spouses share the same set of children, because usually both parents place the same importance in passing their estate to their shared descendants. However, this same understanding does not always exist when the spouses have children from prior marriages or one spouse brings more wealth into the marriage.

What does a “mutual will” look like? A well-drafted mutual will includes language in which both spouses unambiguously declare that they both intend to make mutual wills that restrict both spouses from changing the distribution plan in their wills after one of them dies. It is best practice to also state in the wills that either spouse can change his or her will during their lives, but only after giving adequate notice to the other spouse of the intention to do so.

However, a mutual will can still exist without any such language in the will. Without this language, though, other evidence would be required to prove that the spouses intended to be bound by the wills. Even an oral agreement would suffice, although the court would subject allegations of an oral contract create mutual wills to a high degree of proof. Portmann v. Herald, No. 49563-5-II (Wn. App. 2018); Arnold v. Beckman, 74 Wn.2d 836, 841 (1968).

Can a spouse ever change his or her will? Yes, under some circumstances. If no consideration is provided for the mutual wills, except the mutual agreement of the spouses, either spouse can change the will prior to the death of the first spouse. However, the change cannot be done in secret. The spouse changing the will must provide adequate notice to the other spouse so he or she has a chance to change his or her will too. After the first spouse dies, however, the surviving spouse cannot change the will.

Can the surviving spouse thwart the mutual will by making nonprobate designations after the death of the first spouse? No. A seemingly clever way of avoiding the restrictions of a mutual will arrangement would be to convert assets from probate assets to nonprobate assets and name beneficiaries inconsistent with the wills. For instance, a surviving spouse might create a joint bank account with right of survivorship with someone not named in the mutual wills. This strategy, however, is subject to being set aside by a court. In one unpublished case, the court rejected a surviving spouse’s attempt to work around the mutual will in this manner, and established a constructive trust on the funds placed into a joint account with right of survivorship. In re Estate of Hodgson, 2006 WL 1135035 (Wn. App. 2006) (unpublished).  

Can a surviving spouse make gifts after the first spouse dies? Yes and no. A surviving spouse is free to make gifts, but cannot make gifts that are intended to undermine the agreement inherent to the mutual wills. In particular, if the gifts are made with “testamentary intent,” such as death-bed gifts, they need to be consistent with the distribution plan in the mutual wills, or the gifts can be set aside by a court. See Newell v. Ayers, 23 Wn. App. 767, 770 (1979).

Bottom Line. If you and your spouse intend to create wills that restrict both of you from changing your wills later, you should clearly state this agreement in your wills. When doing so, it’s important to keep in mind that you will each have significant restrictions later. If one of you has died and the distribution plan later makes no sense, too bad. You can’t change it, and you can’t take steps to work around it, such as by making gifts or beneficiary designations contrary to the agreed distribution plan. Be sure to consider these issues carefully before making mutual wills. 

Hiring a Probate Attorney: Hourly Fees, Flat Fees and Unbundled Services

For some people, hiring an attorney can be intimidating. But it doesn’t need to be. If the attorney is intimidating, find another one. If the attorney can’t explain the legal issues in terms you understand, find another one. If the attorney can’t give you an estimate of legal fees with reasonable certainly, definitely find another one!

Fortunately, the legal fees for a probate attorney are typically considered expenses of the estate. Therefore, the administrator or personal representative who hires a lawyer and incurs legal bills in the administration of the estate can be reimbursed by the estate for those fees. Still, the administrator or personal representative has a fiduciary duty to spend the estate's funds wisely, and paying reasonable fees is part of that duty. 

There are generally three types of fee arrangements you and a probate attorney might agree to.

Hourly Billing 

The most traditional type of billing method is “hourly billing,” where an attorney bills a fixed hourly rate for each hour he or she works. While this billing method might work well in some situations, it has significant drawbacks for clients. The most significant being uncertainty. Often an attorney will give you an estimate of the total bill, but the attorney can’t be sure, and the monthly drip of lawyer fees can cause clients some anxiety.

Flat Fees

A less traditional method for billing is the flat fee. This is growing in popularity among lawyers and clients, and it’s my preferred way of billing. With flat fee billing, the client and attorney agree on a set price for a project, which could be an entire probate or some limited aspect of it. The terms of the engagement are clearly spelled out in a fee agreement, which you and the lawyer sign. Flat fee arrangements have the advantage of certainty, and they avoid the monthly annoyance of lawyer invoices. Both you and your lawyer can focus on getting the job done right, and remove the issue of fees. Under this type of an arrangement, you can call your lawyer if you have a question without worrying about the clock running. 

Unbundled Services 

Unbundled services is also a less traditional method for billing, but it is also growing in popularity. Whether it be probates, family law, or other types of law, more and more people are trying to tackle the legal system on their own. Often this is because they don’t have the money to afford an attorney, or they believe, mistakenly, that practicing law is easy. Unbundled services is much like the flat fee arrangement discussed above, but usually on a more limited scope. For example, you and your attorney can agree that the attorney will review the pleadings and documents you’ve prepared, but that you will do everything else. Or the attorney might prepare the documents for you, and file them with the court, but then you’re on your own. Also, you could pay for a couple of hours of the lawyer’s time to get general advice and sketch out a strategy for your probate matter. Whatever you and your lawyer decide, the terms of the limited scope of services must be clearly defined in a fee agreement. Typically, these types of arrangements cost less than hourly or flat fee arrangements, but they require more work and skill from the client.