HOUSE BILL REPORT

                  HB 1061

             As Reported By House Committee on:

                          Judiciary

Title:  An act relating to deductibility of funeral expenses and costs of administration.

Brief Description:  Making funeral expenses and cost of administration fully deductible from the decedent's estate.

Sponsor(s):  Representatives Ludwig, Padden, R. Meyers, Ferguson, Miller, Orr, Kremen, Winsley and Sheldon.

Brief History:

  Reported by House Committee on:

Judiciary, January 29, 1991, DPS.

HOUSE COMMITTEE ON

JUDICIARY

Majority Report: That Substitute House Bill No. 1061 be substituted therefore, and the substitute bill do pass.  Signed by 15 members:  Representatives Appelwick, Chair; Ludwig, Vice Chair; Padden, Ranking Minority Member; Paris, Assistant Ranking Minority Member; Broback; Forner; Hargrove; Inslee; R. Meyers; Mielke; Riley; Scott; Tate; Vance; and Wineberry.

Staff:  Bill Perry (786-7123).

Background:  When one spouse of a marriage dies, the funeral expenses and costs of administering the deceased spouse's estate become community debts.  As community debts, these costs are payable one-half out of each community property share.  That is, one-half of the debt is owed by the estate of the deceased, and one-half of the debt is owed by the surviving spouse.  The federal tax code limits estate tax deductions for funeral expenses and the costs of administration to those debts charged to the estate. 

Summary of Substitute Bill:  When a spouse dies, the associated funeral and estate administration costs are debts payable out of the estate.  These costs may not be charged to the community share of the surviving spouse regardless of the surviving spouse's ability to pay the costs and regardless of the liability of the surviving spouse or anyone else for the debt.  Contracts for payment of funeral expenses are not affected, but any person paying reasonable expenses may be reimbursed by the estate.  Determinations by the department regarding state payment for funeral expenses are not affected by this act.

Substitute Bill Compared to Original Bill:  The substitute clarifies the status of contractual arrangements regarding funereal expenses, and exempts Department of Social and Health Services decisions from the act.

Fiscal Note:  Not requested.

Effective Date of Substitute Bill:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  The act will allow Washington surviving spouses to take fuller advantage of federal tax laws.

Testimony Against:  None.

Witnesses:  Mike Carrico, Washington State Bar Association (in favor of bill).