AN
ACT Relating to nonprobate asset beneficiary designation; and amending RCW
11.07.010.
BE IT
ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec.
1. RCW
11.07.010 and 1998 c 292 s 118 are each amended to read as follows:
(1)
This section applies to all nonprobate assets, wherever situated, held at the
time of entry by a superior court of this state of a decree of dissolution of
marriage or a declaration of invalidity.
(2)(a)
If a marriage is dissolved or invalidated, a provision made prior to that event
that relates to the payment or transfer at death of the decedent's interest in
a nonprobate asset in favor of or granting an interest or power to the
decedent's former spouse is revoked. A provision affected by this section must
be interpreted, and the nonprobate asset affected passes, as if the former
spouse failed to survive the decedent, having died at the time of entry of the
decree of dissolution or declaration of invalidity.
(b)
This subsection does not apply if and to the extent that:
(i)
The instrument governing disposition of the nonprobate asset expressly provides
otherwise;
(ii)
The decree of dissolution or declaration of invalidity requires that the
decedent maintain a nonprobate asset for the benefit of a former spouse or
children of the marriage, payable on the decedent's death either outright or in
trust, and other nonprobate assets of the decedent fulfilling such a
requirement for the benefit of the former spouse or children of the marriage do
not exist at the decedent's death; or
(iii)
If not for this subsection, the decedent could not have effected the revocation
by unilateral action because of the terms of the decree or declaration, or for
any other reason, immediately after the entry of the decree of dissolution or
declaration of invalidity.
(3)(a)
A payor or other third party in possession or control of a nonprobate asset at
the time of the decedent's death is not liable for making a payment or
transferring an interest in a nonprobate asset to a decedent's former spouse
whose interest in the nonprobate asset is revoked under this section, or for
taking another action in reliance on the validity of the instrument governing
disposition of the nonprobate asset, before the payor or other third party has
actual knowledge of the dissolution or other invalidation of marriage. A payor
or other third party is liable for a payment or transfer made or other action
taken after the payor or other third party has actual knowledge of a revocation
under this section.
(b)
This section does not require a payor or other third party to pay or transfer a
nonprobate asset to a beneficiary designated in a governing instrument affected
by the dissolution or other invalidation of marriage, or to another person
claiming an interest in the nonprobate asset, if the payor or third party has
actual knowledge of the existence of a dispute between the former spouse and
the beneficiaries or other persons concerning rights of ownership of the
nonprobate asset as a result of the application of this section among the
former spouse and the beneficiaries or among other persons, or if the payor or
third party is otherwise uncertain as to who is entitled to the nonprobate
asset under this section. In such a case, the payor or third party may,
without liability, notify in writing all beneficiaries or other persons
claiming an interest in the nonprobate asset of either the existence of the
dispute or its uncertainty as to who is entitled to payment or transfer of the
nonprobate asset. The payor or third party may also, without liability, refuse
to pay or transfer a nonprobate asset in such a circumstance to a beneficiary
or other person claiming an interest until the time that either:
(i)
All beneficiaries and other interested persons claiming an interest have
consented in writing to the payment or transfer; or
(ii)
The payment or transfer is authorized or directed by a court of proper
jurisdiction.
(c)
Notwithstanding subsections (1) and (2) of this section and (a) and (b) of this
subsection, a payor or other third party having actual knowledge of the
existence of a dispute between beneficiaries or other persons concerning rights
to a nonprobate asset as a result of the application of this section may
condition the payment or transfer of the nonprobate asset on execution, in a
form and with security acceptable to the payor or other third party, of a bond
in an amount that is double the fair market value of the nonprobate asset at
the time of the decedent's death or the amount of an adverse claim, whichever
is the lesser, or of a similar instrument to provide security to the payor or
other third party, indemnifying the payor or other third party for any
liability, loss, damage, costs, and expenses for and on account of payment or
transfer of the nonprobate asset.
(d)
As used in this subsection, "actual knowledge" means, for a payor or
other third party in possession or control of the nonprobate asset at or
following the decedent's death, written notice to the payor or other third
party, or to an officer of a payor or third party in the course of his or her
employment, received after the decedent's death and within a time that is
sufficient to afford the payor or third party a reasonable opportunity to act
upon the knowledge. The notice must identify the nonprobate asset with
reasonable specificity. The notice also must be sufficient to inform the payor
or other third party of the revocation of the provisions in favor of the
decedent's spouse by reason of the dissolution or invalidation of marriage, or
to inform the payor or third party of a dispute concerning rights to a
nonprobate asset as a result of the application of this section. Receipt of
the notice for a period of more than thirty days is presumed to be received
within a time that is sufficient to afford the payor or third party a
reasonable opportunity to act upon the knowledge, but receipt of the notice for
a period of less than five business days is presumed not to be a sufficient
time for these purposes. These presumptions may be rebutted only by clear and
convincing evidence to the contrary.
(4)(a)
A person who purchases a nonprobate asset from a former spouse or other person,
for value and without actual knowledge, or who receives from a former spouse or
other person payment or transfer of a nonprobate asset without actual knowledge
and in partial or full satisfaction of a legally enforceable obligation, is
neither obligated under this section to return the payment, property, or
benefit nor is liable under this section for the amount of the payment or the
value of the nonprobate asset. However, a former spouse or other person who,
with actual knowledge, not for value, or not in satisfaction of a legally enforceable
obligation, receives payment or transfer of a nonprobate asset to which that
person is not entitled under this section is obligated to return the payment or
nonprobate asset, or is personally liable for the amount of the payment or
value of the nonprobate asset, to the person who is entitled to it under this
section.
(b)
As used in this subsection, "actual knowledge" means, for a person
described in (a) of this subsection who purchases or receives a nonprobate
asset from a former spouse or other person, personal knowledge or possession of
documents relating to the revocation upon dissolution or invalidation of
marriage of provisions relating to the payment or transfer at the decedent's
death of the nonprobate asset, received within a time after the decedent's
death and before the purchase or receipt that is sufficient to afford the
person purchasing or receiving the nonprobate asset reasonable opportunity to
act upon the knowledge. Receipt of the personal knowledge or possession of the
documents for a period of more than thirty days is presumed to be received
within a time that is sufficient to afford the payor or third party a
reasonable opportunity to act upon the knowledge, but receipt of the notice for
a period of less than five business days is presumed not to be a sufficient
time for these purposes. These presumptions may be rebutted only by clear and
convincing evidence to the contrary.
(5)
As used in this section, "nonprobate asset" means those rights and
interests of a person having beneficial ownership of an asset that pass on the
person's death under only the following written instruments or arrangements
other than the decedent's will:
(a)
A payable-on-death provision of a life insurance policy, employee benefit plan,
annuity or similar contract, or individual retirement account, unless
provided otherwise by controlling federal law;
(b)
A payable-on-death, trust, or joint with right of survivorship bank account;
(c)
A trust of which the person is a grantor and that becomes effective or
irrevocable only upon the person's death; or
(d)
Transfer on death beneficiary designations of a transfer on death or pay on
death security, if such designations are authorized under Washington law.
For
the general definition in this title of "nonprobate asset," see RCW
11.02.005(15) and for the definition of "nonprobate asset" relating
to testamentary disposition of nonprobate assets, see RCW 11.11.010(7).
(6)
This section is remedial in nature and applies as of July 25, 1993, to decrees
of dissolution and declarations of invalidity entered after July 24, 1993, and
this section applies as of January 1, 1995, to decrees of dissolution and
declarations of invalidity entered before July 25, 1993.
