A Washington broker is advising a married couple who want to take title to their new home in a way that avoids probate when either spouse dies AND ensures the surviving spouse receives a full step-up in tax basis on the entire property. Which form of title best achieves BOTH objectives under Washington law?
Correct Answer
D) Community property with right of survivorship
Community property with right of survivorship (RCW 64.28.070) uniquely satisfies both objectives. First, like joint tenancy, it includes a right of survivorship that transfers the deceased spouse's interest automatically to the survivor outside of probate. Second, because the property retains its community property character, the surviving spouse receives a full step-up in tax basis on the ENTIRE property (both halves) at the first spouse's death — a significant federal income tax advantage. Joint tenancy only provides a step-up on the deceased's half, not the full property.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Community property is a system where property acquired during a marriage is owned equally by both spouses.
A freehold estate represents ownership of real property with an indefinite duration.
Joint tenancy is a form of co-ownership in which two or more persons hold equal, undivided interests in property with the right of survivorship. When one joint tenant dies, their interest automatically passes to the surviving joint tenants.
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