Articles Posted in Washington Supreme Court

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Barry Ackerley died in 2011. In 2008 and 2010, Ackerley made substantial gifts of money. On these inter vivos gifts, Ackerley paid the required federal gift taxes, which amounted to over $5.5 million. Upon his death, Ackerley was required under the federal estate tax code to include the value of the gift taxes paid in his federal taxable estate because he died within three years of making the gifts. Ackerley's estate thus included the gift taxes in its federal estate tax return. But when Ackerley's estate filed his Washington estate tax return, it did not include the $5.5 million in federal gift taxes paid as part of the Washington taxable estate. The Department of Revenue issued a notice of assessment, notifying Ackerley's estate that it owed additional Washington estate taxes on the amount of federal gift taxes paid. The Estate and Transfer Tax Act, chapter 83.100 RCW, made clear that calculating a Washington taxable estate begins with the federal taxable estate and that the Washington definition of "transfer" is the same as the federal definition. Under federal estate tax law, the gift tax paid is included in the taxable estate under the "gross-up rule" and, as such, is transferred upon death as part of the entire estate. Following the legislature's clear mandate, the Washington Supreme Court must also find that the gift tax paid is part of the Washington taxable estate and transferred upon death as part of the entire estate. Thus, the DOR properly included the gift tax paid in its assessment of Ackerley's estate. View "Estate of Ackerley v. Dep't of Revenue" on Justia Law

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Virgil Becker, a retired doctor, was killed in a plane crash. His estate claimed that a faulty carburetor caused the crash. Forward Technology Industries Inc. (FTI) built a component for that carburetor. The Estate brought numerous claims against FTI, including a state product liability claim implicating a faulty carburetor component. FTI moved for summary judgment, arguing that the Federal Aviation Administration Authorization Act of 1994 preempted state law. The federal district court for the Third Circuit recently found that federal aviation regulations do not preempt the state product liability of an aviation systems manufacturer because they were “not so pervasive as to indicate congressional intent to preempt state law.” The Washington Supreme Court followed the Third Circuit and found that the Federal Aviation Act did not preempt state law, reversed the Court of Appeals which held to the contrary, and remanded this case back to the trial court for further proceedings. View "Estate of Becker v. Forward Tech. Indus., Inc." on Justia Law

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Ray Sandberg served in the United States Navy during World War II. Afterward, he worked for decades in dockyards and lumberyards. Throughout his work life, he had been exposed to asbestos. He contracted lymphoma, pleural disease and asbestosis relating to asbestos exposure. In 1999, he sued nearly 40 defendants who had some part in exposing him to asbestos. Most defendants settled; of the one that did not, Sandberg obtained a $1.5 million judgment. At age 84, Sandberg died. His daughter Judy Deggs, as personal representative of Sandberg's estate, sued additional companies that had not been named in her father's original lawsuit. The record of this case does not explain why the additional companies were not named in the 199 suit. The defendants here moved to dismiss this suit as time barred. The Court of Appeals affirmed the dismissal. On appeal, Deggs argued that the wrongful death claim she brought was a distinct statutory claim and that her injuries were not the same injuries her father suffered and sued for in 1999: her injuries were due to the loss of her father, which did not occur until he died. The Supreme Court affirmed dismissal, finding that "[a] wrongful death 'action accrues at the time of death' so long as there is 'a subsisting cause of action in the deceased' at the time of death subject to exceptions no present here." The Court found insufficient cause to abandon that well-established precedent in this case. View "Deggs v. Asbestos Corp." on Justia Law

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At issue in this case was a will contest and whether the will proponents presented sufficient evidence to rebut a presumption of undue influence. The trial court invalidated the will, finding that it was the product of undue influence. The trial court's factual findings were not challenged on appeal, but the Court of Appeals reversed and remanded for a new trial, holding that the trial court failed to make findings of direct evidence to support its conclusion of undue influence, relying solely on the presumption of undue influence to invalidate the will. The Supreme Court reversed, finding that the proper inquiry here was whether the trial court's unchallenged findings of fact supported its conclusions of law. The Court of Appeals erred by reweighing evidence that sufficiently supported the trial court's conclusions. The Court reinstated the trial court's judgment invalidating the will as a product of undue influence. View "In re Estate of Barnes" on Justia Law

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When Dr. Virgil Becker, Jr. died, his will left everything to his youngest daughter. His three older daughters contested the will, and the issue before the Supreme Court on appeal was whether his surviving spouse, Dr. Nancy Becker, had standing to participate in that will contest. Upon review, the Supreme Court held that because Nancy had a direct, immediate, and legally ascertainable interest in the decedent's estate if the will was declared invalid, she would have standing in the will contest. View "In re Estate of Becker" on Justia Law

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Dr. James Haviland was a medical doctor who practiced in the Seattle area. Several years after the death of his first wife, the 85-year-old Dr. Haviland met 35-year-old Mary Burden who worked at the hospital where he was a patient. Following his discharge, the two began dating, and the doctor agreed to pay towards Ms. Burden's education and gave her an additional "nest egg." The couple married in 1997. The day before the wedding, Dr. Haviland changed his will to include his new wife, and revised it several more times during the marriage. The 2006 amendment allowed the doctor's total probate estate to pass to his new wife, excepting several special bequests. Ms. Haviland amended the doctor's living trust, transferred securities for her own benefit, and made multiple large cash gifts to her family members. Large sums of money were also transferred from the couple's joint checking account to Ms. Haviland's separate account. After Dr. Haviland died, his children contested the multiple amendments to his will. The trial court ultimately found that the estate was "so depleted by Mary's transfer of funds that, after distribution of specific bequests, the total value of the estate is a negative." The court invalidated the will after finding that the 2006 amendment was the product of undue influence. During the pendency of the contest, the Washington legislature amended the slayer statutes to disinherit those who financially abuse vulnerable adults. In light of the amendments, the administrator of the doctor's estate requested the trial court to determine whether Ms. Haviland should have been disinherited based on her conduct with respect to Dr. Haviland and as found by the trial court. The court determined that the abuser statutes did not apply to deny Ms. Haviland benefits from the estate since the statutes were triggered by financial abuse. The Court of Appeals reversed and remanded, holding that the petition filed during probate to adjudicate whether an individual is an abuser was the triggering event for the statutes to apply, and as such, acted prospectively applied to the Haviland estate. Ms. Haviland appealed the appellate court's holding. After its review, the Supreme Court affirmed, concurring that the abuser statutes act prospectively, and that the filing of the abuser petition during probate is the trigger. View "In re Estate of Haviland" on Justia Law

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In this case, the issue before the Supreme Court was whether Jeffrey Manary or Edwin Anderson were entitled to a decedent's interest in real property that had been deeded to a trust. Manary claimed the interest as a successor trustee; his claim was based on the trust. Anderson claimed the interest as a testamentary beneficiary; his claim was based on chapter 11.11 RCW (the Testamentary Disposition of Nonprobate Assets Act). Upon review, the Supreme Court concluded that an owner complies with the Act when he specifically refers to a nonprobate asset in his will, even if he does not refer to the instrument under which the asset passes. Anderson was entitled to the decedent's interest in the property, but he was not entitled to attorney fees for answering the petition for review. View "Manary v. Anderson" on Justia Law

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The Estates of Barbara J. Nelson and Sharon M. Bracken challenged the efforts of the Washington State Department of Revenue (DOR) to treat them as having engaged in a present taxable transfer of assets that were actually transferred years ago by Ms. Nelson’s and Ms. Bracken’s late husbands’ estates. DOR relied on the legislature’s adoption in 2005 of definitions from the federal estate tax regime. Upon review, the Supreme Court held that DOR exceeded its authority in enacting regulations that allowed it to treat transfers completed by William Nelson and Jim Bracken years ago as if the estates had elected to defer state estate tax on the transfers, to be paid by their wives’ estates. DOR stood on a different footing than the United States Treasury; "DOR must rely on the asserted authority of our legislature to tax transfers years after the fact absent any deferral agreement by the taxpayer." The Court reversed the trial court and directed summary judgment be entered in favor of the Estates. View "In re Estate of Bracken" on Justia Law

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This case arose from the tragic death of a teenager Ashlie Bunch. Ashlie’s adoptive father, Steven Bunch (Bunch) brought an action under RCW 4.24.010, against the treatment center where Ashlie committed suicide, McGraw Residential Center. Ashley’s adoptive mother, Amy Kozel, sought to join the lawsuit as a necessary party under CR 19(a). The superior court denied Kozel’s motion and the Court of Appeals affirmed. Finding that Kozel satisfied statutory standing requirements and CR 19(a), the Supreme Court reversed the Court of Appeals and remanded the case for further proceedings. View "Estate of Bunch v. McGraw Residential Ctr." on Justia Law

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The issue before the Supreme Court involved whether the children of a decedent's predeceased spouse could be considered "stepchildren" under the wrongful death recovery statute. The decedent Audrey Blessing and the children's father were married in 1964. The children's father died in 1994, and Blessing died in 2007. Her estate brought a wrongful death suit, arguing that the children ceased being her step children when their father died. The trial court relied on the close relationship the children and decedent maintained up until her death, and ruled that the children were indeed "stepchildren" and could be beneficiaries in the wrongful death action. The Court of Appeals reversed, holding that the stepchild/stepparent relationship legally ended before Blessing's death. Finding that the statutory term "stepchildren" was undefined in the statute, the Supreme Court held that which parent died first was irrelevant to whether a stepchild could maintain that status. "Any concerns over the result or regarding which stepchildren should be entitled to recover in a wrongful death suit are more appropriately factored into any damages determination." View "In re Estate of Blessing" on Justia Law