SENATE BILL REPORT

                  SSB 6181

              As Passed Senate, February 9, 1998

Title:  An act relating to probate, trust, and estate law.

Brief Description:  Regulating probate, trusts, and estates.

Sponsors:  Senate Committee on Law & Justice (originally sponsored by Senators Johnson and Roach).

Brief History:

Committee Activity:  Law & Justice:  1/19/98, 1/27/98 [DPS].

Passed Senate, 2/9/98, 48-1.

SENATE COMMITTEE ON LAW & JUSTICE

Majority Report:  That Substitute Senate Bill No. 6181 be substituted therefor, and the subnstitute bill do pass.

  Signed by Senators Roach, Chair; Johnson, Vice Chair; Fairley, Goings, Hargrove, Kline, Long, McCaslin, Stevens, Thibaudeau and Zarelli.

Staff:  Harry Steinmetz (786-7421)

Background:  Under current Washington law, it is impossible for a person through a new will to modify non-probate asset arrangements and to effect an equal division of all assets among his or her heirs, without modifyingCpresumably closingCthese accounts.  Non-probate assets are defined in the bill and include such things as joint bank accounts with a "payable on death" clause.  Although the intent in setting up the account may have been to provide for a source of funds for all heirs, the heir on the account may take all the money regardless of the intent of the will.

Summary of Bill:  Persons are allowed to designate by will the beneficiaries at death of certain assets that are not otherwise subject to probate proceedings.  By writing his or her will, a person can supersede pre-existing beneficiary designations on joint bank accounts with rights of survivorship, transfer on death securities and certain other limited assets in order to enable the terms of his or her will to govern the disposition of all those assets.

A minor technical correction is made to SSB 5510 passed by the Legislature in 1997.  The primary correction replaces provisions that were prematurely repealed as of July 27, 1997, though their replacement provisions did not take effect until January 1, 1998.

Minor changes to the Uniform Transfers to Minors Act are made to allow an individual to appoint a custodian to hold an asset for the child when a future event actually occurs.

References made in Washington's probate code and estate tax statutes are updated to the current provisions of the Internal Revenue Code to reflect current law.

Appropriation:  None.

Fiscal Note:  Requested on January 16, 1998.

Effective Date:  The bill contains several effective dates.  Please refer to the bill.

Testimony For:  This bill makes it easier for a person to control the disposition of certain non-probates assets.  People often open joint bank accounts, with a right of survivorship with a child, but not intending that all the assets of that account go to that child.  Under current law, that will happen.  This bill allows the will to control the distribution of specified non-probate assets in accordance with the decedent's intent.  Further, it provides for notice provisions to banks and other holders of non-probate assets.

Additionally, the bill makes a minor change in the Uniform Transfer to Minors Act to allow a current practice that is not clearly authorized.  Lastly, it makes technical changes to update and correct mistakes in the current probate code.

Testimony Against:  None.

Testified:  Mike Carrico, Washington State Bar Association (pro).

House Amendment(s):  Technical changes are made to clarify the effective date of the 1997 legislation.  Credit union accounts are included in the list of non-probate assets subject to a subsequent will.  The effective date of the testamentary disposition provisions are delayed until July 1, 1999.