HOUSE BILL REPORT

SB 6113

BYSenator Pullen

Making technical corrections to quasi-community property laws.

House Committe on Judiciary

Majority Report:  Do pass.  (12)

      Signed by Representatives Armstrong, Chair; Crane, Vice Chair; Brough, Hargrove, P. King, Meyers, Padden, Patrick, Schmidt, Scott, Wang and Wineberry.

House Staff:Harry Reinert (786-7110)

AS PASSED HOUSE FEBRUARY 26, 1988

BACKGROUND:

Under Washington law, unless the spouses agree otherwise, property acquired by the spouses while they reside in Washington is generally considered community property.  Community property is generally divided equally between the spouses if there is a dissolution of marriage.  Upon the death of one of the spouses, one-half of the community property belongs to the surviving spouse.  The spouse who has died may dispose of one-half of the community property in any manner in which he or she wishes.  If the spouse has made no provision for disposition of his or her portion of the community property, the surviving spouse receives all of the community property.

In 1986 the Legislature enacted provisions relating to property which was acquired by spouses when they were not residing in this state.  The property is called "quasi-community property" and is treated as though it had been acquired in this state. Quasi-community property may include personal property located anywhere and real property located in this state.  Leasehold interests in real property are considered to be real property.  The characterization of property as quasi-community property is relevant only for the disposition of property at the time of a spouse's death.

If a spouse, without fair value or the consent of the surviving spouse, has transferred quasi-community property to another person within three years of death, the surviving spouse may claim one-half the value of the transferred property.  A transferee of property who has purchased the property for value without knowledge that it was quasi-community property is not required to restore the property or proceeds to the decedent's estate.

Spouses may agree to waive, modify, or relinquish any quasi-community property right.

SUMMARY:

Real property is quasi-community property if it is located in this state.  Real property is also quasi-community property if it located outside of this state and the law of the state where it is located provides that law of the state where the owner died governs the rights of the surviving spouse's interest in the property. Leasehold interests are treated as real property.

The principles applicable to the characterization of property as community property apply to the determination of whether the property is quasi-community property.

Quasi-community property transferred by a spouse within three years of the spouse's death is not required to be restored to the decedent's estate if the property was paid for with fair value, was transferred with the consent of the surviving spouse, or the transferee purchased the property for value, or the transferee did not know the property was quasi-community property of the decedent.

Spouses may agree to waive, modify, or relinquish quasi-community property rights.  The agreement may have been executed anywhere and have been executed before or after the effective date of the 1986 statute establishing quasi-community property rights in this state.  Community property agreements and prenuptial and postnuptial agreements may modify quasi-community property rights.

The act is declared to be an emergency and takes effect immediately.

Fiscal Note:      Not Requested.

Effective Date:The bill contains an emergency clause and takes effect immediately.

House Committee ‑ Testified For:    Douglas Lawrence, WSBA.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    The bill makes improvements in the quasi-community property law adopted in 1986.  It will provide better protection for spouses with respect to real property acquired in other states and clearly allows the spouses to waive the statute through written agreements.  It also provides additional protection to innocent third parties who acquire quasi-community property.

House Committee - Testimony Against:      None Presented.