Apr 2017 AFR: 2.6%
Gift Annuity State Regulations

Washington


Intestacy


General Definition

A decedent's intestate estate is defined as any part of the estate not effectively disposed of by a valid will.

Order of Distribution

The net estate of a person dying intestate must descend and be distributed as follows. The surviving spouse or state registered domestic partner will receive the following share:

  1. All of the decedent's share of the net community estate; and
  2. 1/2 of the net separate estate if the intestate is survived by issue; or
  3. 3/4 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; or
  4. All of the net separate estate, if there is no surviving issue nor parent nor issue of parent. Sec. 11.04.015.

The share of the net estate not distributable to the surviving spouse or state registered domestic partner, or the entire net estate if there is no surviving spouse or state registered domestic partner, will be distributed as follows:

  1. To the issue of the intestate; if they are all in the same degree of kinship to the intestate, they will take equally, or if of unequal degree, then those of more remote degree shall take by representation.
  2. If the intestate not be survived by issue, then to the parent or parents who survive the intestate.
  3. If the intestate is not survived by issue or by either parent, then to that issue of the parent or parents who survive the intestate; if they are all in the same degree of kinship to the intestate, they will take equally, or, if of unequal degree, then those of more remote degree shall take by representation.
  4. If the intestate is not survived by issue or by either parent, or by any issue of the parent or parents who survive the intestate, then to the grandparent or grandparents who survive the intestate; if both maternal and paternal grandparents survive the intestate, the maternal grandparent or grandparents will take one-half and the paternal grandparent or grandparents will take one-half.
  5. If the intestate is not survived by issue or by either parent, or by any issue of the parent or parents or by any grandparent or grandparents, then to those issue of any grandparent or grandparents who survive the intestate; taken as a group, the issue of the maternal grandparent or grandparents will share equally with the issue of the paternal grandparent or grandparents, also taken as a group; within each such group, all members share equally if they are all in the same degree of kinship to the intestate, or, if some be of unequal degree, then those of more remote degree will take by representation. Sec. 11.04.015.

Will Qualifications


Common Law or Community Property

Washington is a community property state. There is no quasi-community property.

Capacity

The testator of a valid will must be a person of sound mind at least 18 years of age. Sec. 11.12.010.

Drafting

Every will must be in writing signed by the testator or by some other person under the testator's direction in the testator's presence, and must be attested by two or more competent witnesses. The witnesses must subscribe their names to the will, or sign an affidavit while in the presence of the testator and at the testator's direction or request. Sec. 11.12.020.

Any or all of the attesting witnesses to a will may, at the request of the testator or, after his or her decease, at the request of the executor or any person interested under it, make an affidavit before any person authorized to administer oaths, stating the facts they would be required to testify to in court to prove the will. The affidavit may be written on the will or may be attached to the will or to a photographic copy of the will. The sworn statement of any witness will be accepted by the court as if it had been taken before the court. Sec. 11.20.020.

Beneficiaries

A beneficiary is any person who has any present and/or future interest, vested or contingent.

The distribution of property depends upon an individual's survivorship of the death of another individual. An individual who is not established by clear and convincing evidence to have survived the other individual by one hundred twenty hours is deemed to have predeceased the other individual. Sec. 11.05A.020.

Modifications

A will, or any part thereof, can be revoked by a subsequent will that revokes, or partially revokes, the prior will expressly or by inconsistency. Sec. 11.12.040.

A will may also be revoked by being burnt, torn, canceled, obliterated, or destroyed, with the intent and for the purpose of revoking the will. This act must be done by the testator or by another person in the presence and by the direction of the testator. If such an act is done by any person other than the testator, at the direction of the testator, the facts of the injury or destruction to the will must be proved by two witnesses. Revocation of a will in its entirety revokes its codicils, unless revocation of a codicil would be contrary to the testator's intent. Sec. 11.12.040.

If, after making a will, the testator's marriage or domestic partnership is dissolved, invalidated, or terminated, all provisions in the will in favor of or granting any interest or power to the testator's former spouse or former domestic partner are revoked, unless the will expressly provides otherwise. Provisions affected by this section must be interpreted, and property affected passes, as if the former spouse or former domestic partner failed to survive the testator, having died at the time of entry of the decree of dissolution or declaration of invalidity. Provisions revoked by this section are revived by the testator's remarriage to the former spouse or reregistration of the domestic partnership with the former domestic partner. Sec. 11.12.051.

Probate Process


Naming of Personal Representative

The decedent has the right to name a personal representative for his or her estate through a validly constructed will. Personal representative includes executor, administrator, special administrator, and guardian or limited guardian and special representative. Sec. 11.02.005. It is the duty of the personal representative to collect and pay any debts of the estate and make distributions to settle the estate. Sec. 11.48.010.

If a personal representative of an estate dies or resigns or the letters are revoked before the settlement of the estate, letters testamentary or letters of administration of the estate remaining unadministered shall be granted to a successor personal representative. The successor will perform the same duties and incur like liabilities as the preceding personal representative, unless the decedent provided otherwise in a duly probated will or unless the court orders otherwise. Sec. 11.28.280.

Admission to Probate

Applications for the probate of a will and for letters testamentary, or either, may be made to the judge of the court having jurisdiction and the court may immediately hear the proofs and either probate or reject the will as the testimony may justify. Upon the hearing the court will enter a formal order, either establishing and probating such will, or refusing to establish and probate the will. The order will be conclusive unless there is a will contest. All testimony in support of the will must be written, signed by the witnesses and certified by the judge of the court. Sec. 11.20.020.

If the application for probate of a will does not request the appointment of a personal representative and the court enters an adjudication of testacy establishing this, no further administration will be required. Sec. 11.20.020.

Notifications

Within twenty days after appointment, the personal representative of the estate of a decedent must make written notice of his or her appointment and the pendency of probate proceedings and serve this notice personally or by mail to each heir, legatee and devisee of the estate and each beneficiary or transferee of a nonprobate asset of the decedent whose names and addresses are known to him or her. Proof of such mailing or service must be made by affidavit and filed in the court of jurisdiction. Sec. 11.28.237.

Inventory

Within three months after appointment, the personal representative must make and verify by affidavit a true inventory and appraisement of all of the property of the estate passing under the will or by laws of intestacy. The personal representative must determine the fair net value, as of the date of the decedent's death, of each item of decedent's property contained in the inventory after deducting the encumbrances, liens, and secured debts. Sec. 11.44.015.

The inventory and appraisement may, but need not be, filed with the cause for probate, but upon receipt of a written request for a copy of the inventory and appraisement from any heir, legatee, devisee, unpaid creditor who has filed a claim or beneficiary, the personal representative will furnish to the person, within ten days of receipt of a request, a copy of the inventory and appraisement. Sec. 11.44.015.

Homestead, Exempt Property and the Family Allowance.

The surviving spouse is entitled to a homestead value equal to the lesser of the total value of all lands, mobile homes, improvements and certain personal property, $125,000 in real estate, or $15,000 in personal property. Sec. 6.13.030.

The surviving spouse may petition the court for an award from the property of the decedent. If the decedent is survived by children of the decedent who are not also the children of the surviving spouse, on petition of such a child the court may divide the award between the surviving and all or any of such children as it deems appropriate. If there is not a surviving spouse, the minor children of the decedent may petition for an award. Sec. 11.54.10(1).

The court may not make this award unless the petition for the award is filed before the earliest of:

(a) Eighteen months from the date of the decedent's death if within twelve months of the decedent's death either:

(i) A personal representative has been appointed; or

(ii) A notice agent has filed a declaration and oath as required in RCW 11.42.010(3)(a)(ii); or

(b) The termination of any probate proceeding for the decedent's estate that has been commenced in the state of Washington; or

(c) Six years from the date of the death of the decedent

The court may also set the amount of support for the family during the period of administration. Sec. 11.54.020.

Debts and Distributions

If the personal representative allows a claim, the personal representative will notify the claimant by personal service or regular first-class mail to the address stated on the claim.

A claim that on its face does not exceed one thousand dollars must be deemed allowed and may not be rejected unless the personal representative has notified the claimant of rejection of the claim within the later of six months from the date of first publication of the notice to creditors and two months from the personal representative's receipt of the claim. Sec. 11.40.090.

The personal representative may petition for an order extending the period for automatic allowance of the claims. Allowed claims must be ranked among the acknowledged debts of the estate to be paid expeditiously in the course of administration. A claim may not be allowed if it is barred by a statute of limitations. Sec. 11.40.090.

Estate/Inheritance Tax


Tax Rate

In 2017, the applicable exclusion amount is $2,129,000 for estate above the $2,000,000 filing threshold. Above that amount, the estate tax is a graduated tax with a top rate of 20%. Sec. 83.100.020(1)(a)(iii).

Property Inclusion

The estate tax is imposed on all real and personal property located in Washington and all intangible property of a Washington resident. Sec. 83.100.040.

Filing and Payment

The estate tax is due within nine months of decedent's date of death. Sec. 83.100.050.

Income Tax Charitable Deductions and/or Credits


No personal income tax in Washington.

Gift Annuity Requirements


Washington, a "registration" state, regulates the issuance of charitable gift annuities under the Revised Code of Washington Sec. 48.38. Also see Revised Code of Washington Sec. 28B.10.487. Charities must obtain a Certificate of Exemption from the Office of the Insurance Commissioner (to avoid regulation as an insurance company) and agree to observe the annual filing requirements before issuing charitable gift annuities in this state. Because annuities are considered securities by the Washington Department of Finances, unauthorized issuance of charitable gift annuities is a violation of state securities law. Failure to comply with state law may result in suspension or revocation of the Certificate, plus possible fines of up to $10,000. Failure to pay within 15 to 30 days of the order levying fines permits the attorney general to bring recover by bringing a civil action.

To qualify, applying charities must have been in continuous operation for three years, maintain $500,000 in unrestricted net assets and a segregated annuity fund. The charity must be organized and operated exclusively as, or for the purpose of aiding, an educational, religious, charitable or scientific institution which is organized as a nonprofit organization without profit to any person, firm, partnership, association, corporation or other entity.

Charitable gift annuity issuance by universities in Washington and The Evergreen State College is regulated under Sec. 28B.10.485, which allows the issuance of gift annuities without a Certificate of Exemption. However, such organizations are required to maintain 100% of the assets given in exchange for the annuity for the lifetimes of the respective annuitants.

Application Process

To register for a Certificate of Exemption, the charity must submit a detailed application to the Office of the Insurance Commissioner. The fee is $25. The Application to Obtain an Exemption to Issue Charitable Gift Annuities must include: evidence of tax-exempt status under the IRC, corporate documents (articles of incorporation and bylaws), Certificate of Good Standing from the state of domicile, a current list of directors and officers, appointment of the Insurance Commissioner as attorney for service of process, the most recently filed Form 990, information on the charity's history, history of the charity's gift annuity program nationwide, a description of the solicitation method of annuities, audited financial statements for the past three (3) years (each accompanied by a certified supplemental schedule of the financial activity of the applicant and reflecting the reserves), sample gift annuities, gift annuity payout rates, applications and brochures and proof of registration with Washington's Secretary of State to solicit contributions. The sample gift annuity agreements are also required with the applications should include form titles and unique identifying form footers in the bottom left-hand corner for separate numbering and indexing, the property value, annuity amount, the manner and frequency of payments, annuitants' age, a misstatement of age provision and the reasonable value of annuity benefits. Washington does not specify any required state-specify disclosure language. Washington also specifically requires applicants to hold a Certificate of Good standing from the domicile state and to be registered with the Washington Secretary of State as a Charitable Organization to solicit contributions.

Disclosure Language

Washington does not specify any required state-specify disclosure language.

Reserve Requirements

The segregated fund must contain a minimum equal to the reserves (present value of annuity payments on all outstanding annuity agreements) plus a surplus of 10% of the reserves. In calculating the reserves, those single immediate annuity agreements issued prior to July 1, 1998 should be calculated using the 1971 individual mortality table and a 6% discount rate (4% for all other agreements) while agreements issued afterwards should be calculated according to Sec. 48.74.030. The amount required may be reduced by the amount of reinsurance purchased on any gift annuities from a properly licensed insurer holding a certificate of authority under RCW 48.05. Copies of any reinsurance agreements must be submitted to the commissioner, identifying which annuity agreements are being insured, and the charity must obtain a written agreement between the annuitant and the insurer that the insurer will directly make the annuity payments to the annuitant should the charity be unable to make the payments. The segregated fund should be invested in accordance with "persons of reasonable prudence, discretion and intelligence exercise in the management of a like enterprise" (as a prudent investor).

Annual Filing Requirements

Once a Certificate of Exemption is granted, Washington requires submission of the WA CGA Annual Report to the Office of the Insurance Commissioner 60 days after the end of the charity's fiscal year. This filing due date cannot be waived or extended and must include an Actuarial Certification, a Report Supplement disclosing any annuity liabilities not covered in the Actuarial Certification, a copy of the bank/brokerage statement(s) of the gift annuity fund balance(s) and an in-force listing of all Washington annuities. The Actuarial Certification should be a qualified actuarial opinion relating to the annuity reserves and other actuarial items for the entire gift annuity program by a qualified actuary. Recently, the Office of the Insurance Commissioner implemented a new requirement that Certificate of Exemption holders that have a fiscal year ending other than December 31 must provide an additional actuarial certification as of their fiscal year end (in addition to the December 31 actuarial certification corresponding to the period of the Annual Report). An Audited Financial Statement and Form 990 must be submitted as well, although there are different due dates for these. The charity's Audited Financial Statement issued by an independent CPA (or notification of when it is expected) is due within 120 days of the charity's fiscal year end that discloses the annuity liabilities (including the 10% required surplus) on a separate line or explained in within the Statement Notes. The Form 990 is due within 15 days of filing with the IRS (unless permanently exempt from this requirement by the IRS). The Annual Report fee is $25 plus $5 per gift annuity issued during the previous calendar year to Washington residents.

State Contact Information

Office of the Insurance Commissioner (for Registration)
P.O. Box 40259
Olympia, WA 98504-0259
(360) 725-7232
Susan Baker (Company Licensing Specialist)
susanb@oic.wa.gov

Office of the Insurance Commissioner (for Annual Filings)
P.O. Box 40259
Olympia, WA 98504-0259
(360) 725-7205
Steve Drutz (Senior Financial Analyst)
SteveD@oic.wa.gov

State Forms

For more information on state-specific form requirements, please contact Crescendo at 800-858-9154.
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