In Washington, married couples can avoid probate by signing a Community Property Survivorship Agreement.

In Washington, married couples can avoid probate by signing a Community Property Survivorship Agreement (CPSA). In the agreement, the couple agrees that when one of them dies, all of that person's property will pass directly to the other. This kind of agreement works well for many couples, but it's not right for everyone. Use a community property agreement only if you want all of your property to go to your spouse or partner.

HOW A COMMUNITY PROPERTY SURVIVORSHIP AGREEMENT WORKS. A CPAS states that (1) all property the couple owns is community property; (2) all property the couple acquires in the future is community property; and (3) when one spouse dies, their 1/2 of the community property vests automatically in their surviving spouse. Washington law permits all community property passed through a CPSA to be transferred to the surviving spouse without probate, so the agreement keeps all of the deceased person's property out of probate.

To use a CPSA, you and your spouse must agree to leave everything to each other, complete the document, and sign it in front of a notary. When one spouse or partner dies, the survivor will become the owner of the deceased person's property, without probate. Title to all real estate is cleared merely by recording the CPSA in every county where the couple owns real estate.

LIMITATIONS TO A COMMUNITY PROPERTY SURVIVORSHIP AGREEMENT. CPSAs are not for everyone. They involve some very important limitations. For example, a simple CPSA does not avoid probate for the surviving spouse, remains in force if you separate (absent some language to the contrary in the agreement itself), doesn't work if you die simultaneously, does not allow gifts to children, does not avoid probate for out-of-state real estate, and may affect eligibility for government benefits.

LIVING WITH A COMMUNITY PROPERTY SURVIVORSHIP AGREEMENT. Even if a CPSA is right for you, you'll need to reevaluate your plan if your circumstances change, and it won't be the only estate planning tool you'll need. You can amend or revoke your community property agreement at any time. To modify a CPSA, have your lawyer draft a new one that meets your specific needs. To revoke your CPSA, both you and your spouse just need to sign a simple revocation.

Revoke your CPSA if you decide to separate, if you make a new estate plan for distributing your property, if or you or your spouse become dependent on SSI or Medicaid, or if your estate grows substantially such that more sophisticated tax planning becomes necessary as part of your general estate plan as a CPSA can defeat the creation of certain estate-tax avoiding Trusts.

ADDITIONAL ESTATE PLANNING. It is wise to pair a CPSA with a Will. A Will lets you name a Personal Representative, nominate guardians for your minor children, and provide a backup plan in case you and your spouse die simultaneously. In your Wills, you and your spouse should each leave all of your property to each other, and then name alternates who will take the property upon the death of the second spouse to die. If there are any inconsistencies between your will and your CPSA, your CPSA will be followed.

It's also a good idea to make a Directive to Physicians, a Health Care Power of Attorney, and a Durable Power of Attorney for finances.

A Directive to Physicians lays out your wishes for end-of-life medical treatment in case you ever cannot speak for yourself. And using a Health Care Power of Attorney, you can name a person to make healthcare decisions for you if you can't.

A Durable Power of Attorney for finances lets you name someone who will take care of your finances if you can no longer do it yourself. In this document, you can also give that person (called your attorney-in-fact) the power to change or revoke your CPSA. This could be very important if you or your spouse became incapacitated. Otherwise, to revoke or modify a CPSA, a court would have to appoint a guardian for the incapacitated person.

If you have questions about Community Property Survivorship Agreements or other estate planning documents, give us a call at 253.858.5434 to set up an appointment today. We represent clients throughout Washington and Idaho and are available to meet in person, by phone, or via video conference.