Chapter 4.5 Rights of Specific Types of Beneficiaries

• Jurisdiction: Washington

§4.5 RIGHTS OF SPECIFIC TYPES OF BENEFICIARIES

This section discusses rights that may be conferred based on the status of the beneficiary, including rights of surviving spouses, omitted spouses and children, after-born children, and others.

(1) Rights of surviving spouses

A number of rights, discussed below, are available to the surviving spouse.

(a) To administer community property

Regardless of whether the surviving spouse is named as personal representative in the will, he or she has the right to administer the couple's community property. "A surviving spouse or surviving domestic partner shall be entitled to administer upon the community property, notwithstanding any provisions of the will to the contrary, if the court find such spouse or such domestic partner to be otherwise qualified." RCW 11.28.030 (emphasis added).

Notably, the surviving spouse must make application for the appointment within 40 days immediately following the death of the spouse or he or she will be considered as having waived the right. Id. If any other person applies for letters testamentary on community property before the expiration of the initial 40 days, that person must give notice to the surviving spouse or "show to the satisfaction of the court" that there is no surviving spouse or surviving domestic partner or that the surviving spouse or partner has, in writing, waived the right to administer the community property. Id.

(b) With respect to community property

Under the intestacy laws, a surviving spouse is entitled to all of the community property. RCW 11.04.015. Under a will, however, a

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decedent can devise his or her one-half of the community property to a third party or parties. RCW 11.02.070. The whole of the community property "shall be" subject to probate, including the payment of debts of the community, the award in lieu of homestead, the allowance for family support, and any other matter for which the community property would be responsible or liable if the decedent were living. RCW 11.02.070.

(c) Under community property agreements

Community property agreements are authorized under RCW 26.16.120. Spouses and domestic partners may agree to dispose of their community property upon death; the typical agreement leaves each spouse or partner's community property to the surviving spouse or partner. The agreement is an enforceable contract, not governed by the statute relating to wills. At the time of the first spouse's death, the community property becomes the sole and separate property of the surviving spouse or partner. Neither spouse or partner can devise or bequeath the property subject to the community property agreement, which controls over an inconsistent will. In re Estate of Catto, 88 Wn.App. 522, 526-27, 944 P.2d 1052 (1997), review denied, 134 Wn.2d 1017 (1998).

The Washington Supreme Court recognized, in Fitzsimmons v. Fitzsimmons, 116 Wash. 635, 637-38, 200 P. 305 (1921), involving a contract entered into in connection with a divorce proceeding, that a contract between husband and wife may be specifically enforced. Cases involving the enforcement of community property agreements after one of the spouses has died do not discuss specific performance as a remedy, e.g., In re Estate of Bachmeier, 147 Wn.2d 60, 52 P.3d 22 (2002), but an order enforcing the community property agreement is in the nature of specific performance. The court in Estate of Bachmeier held that a community property agreement does not impliedly terminate by operation of law when the marriage becomes defunct. 147 Wn.2d 69.

Practice Tip: It is not necessary that each party have separate counsel. In re Marriage of Zier, 136 Wn.App. 40, 147 P.3d 624 (2006), review denied, 162 Wn.2d 1008 (2007). However, best practice is to make sure both parties receive independent advice from separate counsel.

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(d) Joint and mutual wills

Mutual wills are separate wills executed pursuant to the contract of two parties to leave their property to particular beneficiaries. A joint will is a single will executed pursuant to such a contract.

If one party to the contract breaches the agreement by making a disposition of his or her estate inconsistent with their joint or mutual wills, the joint or mutual wills will be specifically enforced. In re Young's Estate, 40 Wn.2d 582, 584, 244 P.2d 1165 (1952) (involving mutual wills); cf. Higgins v. Stafford, 123 Wn.2d 160, 169, 866 P.2d 31 (1994) (spouses executed community property agreement (CPA), and later executed mutual wills that were inconsistent with the CPA; upon action for specific performance of wills by an interested heir, court found the CPA effectively rescinded by the wills).

(e) Omitted spouses

See §12.3 in Chapter 12 (Estate Administration Issues) of this deskbook for a discussion of omitted spouses.

(f) With respect to separate property

The share of separate property a surviving spouse receives in an intestate estate depends on what other relatives the decedent has still living. He or she is entitled to the following:

(1)	one-half of the net separate estate if the intestate is survived by issue (i.e children);
(2)	three-quarters of the net separate estate if there is no surviving issue, but the intestate is survived by one or more of his or her parents, or by one or more of the issue of one or more of his or her parents (i.e., siblings) or
(3)	all of the net separate estate, if there is no surviving issue nor parent nor issue of parent (sibling).

(2) Prenuptial and postnuptial agreements

Washington state, unlike 26 other states, has not adopted the Uniform Premarital Agreement Act. Nor has Washington adopted any specific statute to govern the execution and enforcement of prenuptial agreements. Therefore, courts in Washington rely on case law to determine the validity of prenuptial agreements.

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Separate property agreements and postnuptial agreements are marital property agreements executed after marriage. These agreements are analyzed under the same two-prong test as prenuptial agreements, discussed below. Also see §4.5(1)(c), above, regarding community property agreements.

(a) In general

To determine the validity of a prenuptial or postnuptial agreement, courts use a two-pronged test first articulated in In re Marriage of Matson, 107 Wn.2d 479, 730 P.2d 668 (1986), and subsequently refined and/or referenced in the following key cases: In re Marriage of Bernard, 165 Wn.2d 895, 204 P.3d 907 (2009); In re Estate of Crawford, 107 Wn.2d 493, 730 P.2d 675 (1986); In re Marriage of Burke, 96 Wn.App. 474, 980 P.2d 265 (1999); In re Marriage of Foran, 67 Wn.App. 242, 834 P.2d 1081 (1992); and In re Marriage of Cohn, 18 Wn.App. 502, 569 P.2d 79 (1977). The two prongs of the test are set out below.

Prong One—Substantive Fairness: Does the agreement provide fairly and reasonably for the party not seeking enforcement? If prong one is satisfied, the analysis stops and the agreement is valid. If not then the courts continue the analysis under prong two.

Prong Two—Procedural Fairness: (1) Was there full and fair disclosure of the extent and character of the property and assets of each party; and (2) was the agreement entered into voluntarily, with full knowledge of rights, and with the benefit of independent advice? Fairness is determined at the time of execution, not at the time of enforcement.

(b) Prong one—substantive fairness

Prong one deals with substantive fairness, which is arguably subjective. Under prong one, the court must consider whether the agreement provides a fair and reasonable provision for the party not seeking enforcement. RCW 26.09.070(3). As a general matter, an agreement is unfair if it is grossly disproportionate in favor of the party seeking enforcement. Marriage of Matson, 107 Wn.2d at 482; Friedlander v. Friedlander, 80 Wn.2d 293, 301, 494 P.2d 208 (1972).

The court specifically stated in Marriage of Matson:

[T]he prenuptial agreement was grossly disproportionate in favor of [the husband]. In fact, after over 13 years of marriage, the agreement

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would serve to deny [the wife] any of her common law and statutory rights for a just and equitable distribution of property. Specifically, the agreement allowed [the husband] to devote substantial portions of his time to the management and reinvestment of his separate property while all appreciation in value, all income, and all earnings of his separate property remained his separate property, throughout.

107 Wn.2d at 486.

In Marriage of Matson, the agreement would have allowed the husband to leave the marriage with property worth over $800,000, while the wife would have left the marriage with only her personal effects. Id. In Marriage of Foran, the wealthy spouse's estate was worth approximately $1 million and the disadvantaged spouse's estate was approximately $8,000 (at marriage). 67 Wn.App. at 242. In Marriage of Bernard, the ratio was approximately $25 million to $8,000. 165 Wn.2d at 905. These disproportionate circumstances contributed to the court's refusal to enforce the agreements in those cases. Id. Thus, the courts find agreements unfair and unenforceable in cases in which the wealthier spouse propounded an agreement that allowed him or her to enrich the separate property at the expense of the community, or to deny the creation of any community property during the marriage.

In Marriage of Bernard, the court held that an "agreement disproportionate to the respective means of each spouse, which also limits the accumulation of one spouse's separate property while precluding any claim to the other spouse's separate property, is substantively unfair." Id. at 905. The original agreement in Bernard limited the wife's inheritance rights, prevented her from seeking spousal maintenance, prevented her from using community property to...