When couples in Washington State get married or register as domestic partners, they can avoid probate if they sign a community property agreement (CPA). By using this type of document, the couple agrees that when one partner dies, all of that person’s property goes to the other. A CPA can be beneficial for many couples, especially those who have no other beneficiaries to leave assets to. 

What Is Community Property?

To determine the outcome of an estate and who receives assets, the State of Washington recognizes several kinds of property ownership. In general, community property is any property or asset gained after marriage (or joining a domestic partnership.) It includes real estate, wages, pensions, stock options or investments, and insurance. Both partners are considered to equally own community property; thus, each partner has a 50 percent ownership interest.

After divorce (or death of a partner), all community property becomes separate property, which belongs entirely to one owner. Unmarried people, or those not in legal domestic partnerships, cannot possess community property.

What Is a Community Property Agreement?

The law makes assumptions about the status of property acquired during the marriage or partnership, but these assumptions can be overridden if both partners agree. Typically, partners use this document to change the disposition of all property, whether presently owned or later acquired, into community property upon the death of a partner. This allows all property to pass directly to the surviving spouse without going through the time or expense of the probate process. Avoiding probate may be appealing to couples with uncomplicated assets they wish to pass entirely and solely to a surviving spouse. However, there are some disadvantages to a CPA.

Disadvantages of a CPA

It’s important to realize that a CPA actually takes priority over your other estate planning documents, including joint tenancy agreements, beneficiary designations for pensions or retirement, and even your will. If your last wishes involve passing any property to beneficiaries other than your spouse, a CPA may not be the right solution for you, and you’ll want to talk to your attorney to avoid any surprises about when the CPA takes precedence. This agreement might just end up being an unnecessary or undesired complication to your estate plan.

Another disadvantage of a CPA is that, should you decide to get a divorce, your CPA will be not be dissolved until finalization of the divorce by the court. Up until that time, it remains in full effect, meaning that if you die before the divorce is complete, your soon-to-be ex will still receive your share of the community property. A CPA needs to have approval from both parties in order to terminate before a divorce is complete.

Additionally, a CPA allows assets to avoid the probate process; however, probate actually provides some important protection against creditors. When going through probate, creditors have a four-month time period to make any claims against an estate, after which they can no longer legally pursue payment for any debts that the estate may hold. This limit is not in effect when probate is skipped via a CPA. And once separate property becomes community property via the CPA, creditors who hold debts against property incurred during your marriage will be able to seek recovery for that property that may have otherwise remained separate. If debt is or could become an issue during or after the marriage, better options may exist.

A Good Will Is Your Best Asset

A community property agreement is a tool that suits some situations and not others. However, there is one other tool in the estate planning box that can be beneficial: your last will and testament. Unlike a CPA, your will can generally be modified or revoked by you at any time. While a will does actually have to enter the probate system, Washington has done a lot in recent years to streamline the process and make it relatively painless for personal representatives and beneficiaries.

An estate planning attorney can help you decide if a community property plan is right for your partnership and also help plan your will and set up a trust. To talk to a Washington attorney who can help you prepare for your family’s future, call the Law Offices of Molly B. Kenny.


Molly B. Kenny
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Divorce and Child Custody Attorney Serving Bellevue and Seattle Washington