| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Judiciary Committee | |
HB 3012
This analysis was prepared by non-partisan legislative staff for the use of legislative members in
their deliberations. This analysis is not a part of the legislation nor does it constitute a
statement of legislative intent.
Title: An act relating to estate distribution documents.
Brief Description: Regarding estate distribution documents.
Sponsors: Representatives Ross, Lantz, Rodne and Williams.
Brief Summary of Bill |
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Hearing Date: 1/29/08
Staff: Lara Zarowsky (786-7123).
Background:
It is unlawful for anyone not authorized to practice law in this state to market estate distribution
documents in or from the state.
An estate distribution document is a will, trust, living trust, or other agreement fixing the terms
of the sale of a decedent's interest in any property at or following the decedent's death, except a
payable on death account, that is prepared for a specific person or prepared as marketing
materials. Marketing includes an offer or agreement to prepare or provide individualized advice
about an estate distribution document.
The practice of law includes not only legal representation of a client in court, but also legal
advice and counsel as well as the preparation of legal instruments and contracts by which legal
rights are secured.
The State Bar Act makes the "unlawful practice of law" a gross misdemeanor punishable by up to
one year in jail and a fine of up to $5,000. "Nonlawyers," for purposes of this statute, include
anyone not an active member in good standing of the State Bar Association. Court rules on the
practice of law regulate admission to the bar and allow for discipline and disbarment of
members, but do not directly regulate or discipline nonlawyers.
The unauthorized marketing of estate distribution documents is a violation of the state
Consumer Protection Act (CPA). Under the CPA, certain activities have been designated by
the Legislature as unfair methods of competition and unfair or deceptive acts or practices in the
conduct of trade or commerce. Various remedies for violations of the CPA are provided,
including authorization for the Attorney General to seek restraining orders. A person who is
injured by a violation of the CPA may recover treble damages, costs, and reasonable attorneys'
fees.
A person that is not authorized to practice law in this state may nonetheless gather information or
assist in preparing estate distribution documents if (1) he or she is employed by someone who is
authorized to practice law in this state, and (2) he or she does not provide legal advice.
Financial institutions are exempt from the prohibition against marketing estate distribution
documents by those not authorized to practice law.
A financial institution is a:
A securities broker-dealer is any person engaged in the business of effecting transactions in
securities for the account of others or for that person's own account. A security is a kind of
contract that can be assigned a value and traded. Examples include notes, stocks, bonds, options,
futures, warrants, and other financial assets.
A transfer on death account allows a holder to pass securities directly to another person or
entity upon death without having to go through probate.
Summary of Bill:
A transfer on death account established under RCW 21.35 is added to the definition of "estate
distribution document."
A securities broker-dealer licensed under state law is added to the definition of "financial
institution" and is therefore exempted from the prohibition against the marketing of estate
distribution documents by anyone not authorized to practice law.
Appropriation: None.
Fiscal Note: Not requested.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.