If you’ve lived in Washington State for any amount of time, you’ve probably heard someone mention that it is a “community property” state.

And they are right, it is.

But, do you really know what that means when it comes to estate planning?

And, more importantly, do you know why it’s important?

Let me give you a quick little test. Fred and Julie are married. They have two kids together. They decide they want to do a simple estate plan and go online and get some forms.

They each create valid wills. They know Washington State is a community property state, so they decide the best thing to do is to give everything to their kids when they die. Fred’s will gives everything to his kids, and Julie’s does the same.

After living a full life, at the ripe old age of 98, Fred dies (Julie is still alive).

What happens under this scenario?

Does Julie get everything that is community property?

Unfortunately, no.

In this scenario Fred and Julie’s kids get all of Fred’s interest.

That means the kids now own 1/2 of the house the live in. They own 1/2 of the money in the bank account. They own 1/2 of the cars in the driveway.

See, community property, generally, is the concept that married couples each have an equal interest in property acquired once they are married. What’s important about this is that each spouse is free to give their half away to whomever they want.

And, just like in this scenario, if you aren’t careful about how you set up your estate plan, there can be unintended consequences.

A sidenote here: if Fred and Julie had not created a will, Julie would have received all of Fred’s share of the community property and 1/2 of any separate property he had.

Like they say in those old commercials, “The More You Know…”

Sincerely,

Christopher Small
CMS Law Firm LLC

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