The Basics of Free Community Property Agreement Forms for Washington State

Community Property Agreements Explained

Community property agreements are a relatively uncommon legal document in Washington, which is something of a surprise given the fact that Washington is a community property state. If you have community property, you should pay attention to this form (even if you already have a will).
Essentially, a community property agreement provides for the division of community property by agreement between husband and wife. In other words, if you and your spouse own community property, and one of you passes away, what will happen to the community property? Will it pass to the other spouse or to the decedent’s heirs? A community property agreement provides that, upon death, the survivor will continue to own the same rights he or she held during the decedent’s lifetime. In other words, it avoids having to go through probate. Without such an agreement, spouse A’s half is subject to the terms of his or her will or Washington’s laws of intestacy and the half could be distributed according to spouse A’s estate plan. This could also avoid the costs associated with probating both spouses’ estates if both spouses pass away within a short period of each other.
Couples can exclude certain property in their agreement but generally agree that the community property of the survivor will consist of the community property owned by the survivor and the other spouse when the agreement is executed (as well as any property acquired after by inheritance , gift, or devise from a third party).
A community property agreement does not change the nature of the ownership of the property. With or without the agreement, the vested interest of the survivor in the decedent’s half-share will continue to belong to the survivor because of his or her status as the surviving spouse.
It is important to note that the agreement is effective only at the death of the first spouse. As a result, spouse A can change his or her estate plan after the agreement is signed, provided that spouse B has not yet died. Also, once the second spouse dies, no additional changes can be made.
There may be a number of reasons to consider a community property agreement: 1) Each spouse may trust the other to pass the property to the children. 2) If there are children from other marriages, the survivor may desire to preserve the decedent’s half of the community property for his or her children. 3) There may be a question about whether a child was born of the marriage or of a prior relationship.
While community property agreements are convenient, they also have disadvantages. The agreement may fail to account for other aspects of estate planning (such as trusts), or not comply with Washington law. In addition, the survivors have no control over the decedent’s half-share and cannot restrict its disposition. Finally, without a will, you have no control over the appointment of the personal representative.

Advantages of Community Property Agreements

After reading the above section, it is easy to determine that one of the main benefits of identifying assets and detailing how the assets will be managed and distributed at death or divorce is to help avoid discord when dividing assets at a time when the spouses’ emotional ties are already under distress. A community property agreement can ease this process. By taking the time to define the property and how the property will be distributed, a couple can communicate more easily regarding the property, which can ease the other issues they may be facing. Additionally, a community property agreement can be particularly useful for married couples who have chosen to marry later in life and require care for minor children from previous marriages or have significant separate property. By entering into a community property agreement, it will clearly set forth how the property will be divided in the event of a divorce. Also, a community property agreement will prevent the property from being commingled with the others’ property so that it can still be passed to the individual’s children from a previous marriage. Further, if the couple does not have significant children to leave their property to, a community property agreement will allow the individual to provide a specific bequest to his or her intended beneficiary.

Legal Provisions for Washington State

The legal requirements for freely drafting a community property agreement in Washington State are straightforward but must be adhered to for the agreement to be binding on the parties. First, the parties to the agreement must be legally married to each other. Washington State, like most states, does not recognize same sex marriage, but Washington State has such recognition, so a same sex couple would be able to sign a community property agreement.
Second, the community property agreement must comply with the Washington Statute RCW 26.16.120, which states: A married couple may enter into an agreement in writing signed by both, and freely made by them, altering or amending the dispositions of property which would be made by law upon the dissolution of marriage or upon the death of either. The agreement may be modified by mutual consent of the parties in writing, signed by both (as the case may be) and freely made by them. In the event of the dissolution of marriage the agreement is enforceable. … Any agreement made under this section shall be enforceable for three years after the death of the party who last died, except to the extent it disposes of the right of either spouse to elect against a will. If a spouse violates this section by concealing, embezzling, or destroying property or fabricating evidence of its disposition, or otherwise by fraud, duress, or conversion, he or she shall be liable for twice the amount taken, concealed, embezzled, or destroyed. A waiver of this section is legally ineffective unless in writing, signed by the person against whom enforcement of such waiver is sought, and freely made by him, or her. Waivers and other amendments made after the attachment of any interest in property created by a community property agreement are subject to the requirements of this section.
This statute sets out the requirements for signing a community property agreement in Washington State. First, the parties must sign it and it must be in writing. Second, it must be freely made by both parties. Neither party can coerce the other one to sign it. Third, it must be freely made by both, meaning that the parties must understand that they are signing a community property agreement and what that means. Consistent with the general contractual requirements of Washington State, consideration, or value, need not pass between the parties. However, because the contract is enforceable for three years after the death of the party who last died, if the first spouse dies second, then the family should keep that contract for at least three years to preclude contesting its value and effect at a later date.
For clarification, a community property agreement should not be confused with a community property trust. While both are community property, they are set forth from the following perspective: the proper perspective to view the community property agreement is that we are jointly working together to combine our property and gift it to the survivor in the event of one of our deaths. The proper way to view the community property trust is that each spouse is gifting their property to the other spouse so that in the event that spouse dies first, the property that spouse left passes to the remaining spouse’s trust, instead of to the spouse’s estate, thereby avoiding probate. In other words, with a community property trust, there is divided ownership, an individual owns property prior to the marriage and love of spouse, and then spouse and spouse enter into a trust agreement transferring that property to the family trust.
In sum, Washington State has specific guidelines for signing a community property agreement, including but not limited to, it must be in writing, must be signed by both parties and freely made by both parties, without coercion or force.

Locating a Free Agreement Form

While you may be able to find free forms online for your community property agreement, you should be sure that the provider you use is reputable. Usually these freestanding community property agreement forms are not written as part of a software program that will also prepare the proper tax and financial documents.
Because only Washington State permits married couples to sign a free-standing community property agreement, it is vital that couples interested in this type of agreement get their form specifically from Washington State resources. There are forms available at the Washington State Bar Association, the Office of the Administrator for the Courts, and within the Revised Code of Washington.

Completing the Agreement Form

Following these steps ensure accuracy and completeness of the form:

Enter the current day’s date.
Fill in the name of each spouse on the designated lines. Most of the time, the names of the spouses and their respective ages are included above the form in the pleadings. However, for clarity during the process of filling out the form, you can enter the information again. This is particularly helpful if the form becomes separated from the pleadings.
Enter the address of your residence in Washington State. You must be living in the State of Washington to complete the form. The address must match the address that is contained in the pleadings.
Complete the "marriage date" and "date of separation" lines.
The form has an option for a third party to complete it on behalf of the spouses. This person must sign the form as well, clearly writing his/her name and the capacity in which he/she is signing. If a party is not able to sign the Agreement, this is an option that may be utilized.
Proceed through the blanks of the form, filling in the requested information. Be careful to maintain the integrity of the numbering of the paragraphs, as this indicates the associated title of the paragraph . This will help you remember where you were rather than having to backtrack constantly. Which can be confusing.
Sign at Capacity. Most people do not consider the sequence in which they must sign. The Agreement requires spouses to sign prior to submission to court. In most cases, you will be submitting the Agreement to court in person, handing the clerk your copy too. In that event, you should only sign the Agreement in front of the clerk. Your signature on the copy handed to the clerk constitutes a copy of the same document. You have now waived your claim to property rights in the community and agreed to a division of assets and debts. You cannot go back and deny signing once it has been filed with the court. If you sign it outside the presence of the clerk, your signature is considered made in bad faith and you have entered into a fraudulent agreement. Or you have just mismanaged your signing; either way it can work against you dramatically in future proceedings. Make sure to sign in front of the clerk.
File both copies of the signed Agreement with the court. The clerk will keep one copy and return the second copy to you, marked "Filed". You should keep this copy in your records.

Avoidable Mistakes

Many people think they can take any community property agreement form off the internet and use that as their own in Washington. Most often, the forms found online are missing information and do not contain legal language that would properly transmute property. Forms are almost always geared toward older couples. Younger couples would do well to consult an attorney about a community property agreement as the agreement is like a joint will, and perhaps not as flexible as one might think. For instance, certain community property can be transferred to a trust upon death. Leaving any property transfer to the survivor could be a disaster for the balance of the estate plan. Individuals sometimes fail to take the time to re-title community property within the Washington community property agreement. One or both spouses may fail to take the time to transfer the jointly owned real property to get recorded with the County Auditor. A community property agreement should also be recorded with the County Auditor to provide actual and constructive notice to creditors. In conclusion, individuals should avoid the use of generic forms found on the internet or in a book. Depending on the county and the height of the community property agreement, titles to real property must be changed. Always seek legal advice before using a community property agreement.

Need Legal Counsel

When it comes to any important financial or legal documentation, it is crucial to seek the representation of an experienced attorney. Regardless if you are handling a simple will or more complicated property matters, sound legal advice can help protect your personal and financial best interests . The security of your future and financial standing is not a matter that should be handled on your own, especially when it comes to such legal matters as community property. An experienced Washington legal professional can explain this complex area of law and give you the quality counsel necessary for creating your community property agreement.