Couple’s Agreement To Leave All To Each Other Enforceable

OCTOBER 20, 1997 VOLUME 5, NUMBER 16

Jack Catto and Marjorie Hansen were married in Tucson in 1988. As testimony later showed, Hansen was “elderly,” and had been widowed twice before. Both parties had real estate holdings, with parcels in Colorado and Washington. Three weeks before the wedding, they executed a prenuptial agreement. According to the agreement, each spouse’s separate property was to remain separate.

Four months after the marriage, Catto and Hansen were living in Washington. Like Arizona, Washington is a “community property” state, which means that property acquired after the marriage was presumed to belong to the marital community. Catto and Hansen had bought a new home in Washington, which they jointly owned. Because of the prenuptial agreement, however, none of the property previously owned by either spouse belonged to the community. Apparently, Catto and Hansen determined that they wished to change that status.

In April, 1989, Catto and Hansen signed a new document, called a “community property and survivorship agreement” prepared by Catto’s Washington attorney (Hansen was not separately represented). This new document recited that all the property of either spouse should henceforth be treated as community property, and that upon the death of either spouse the survivor should immediately assume ownership of all community property.

Over three years later, Hansen left Catto and relocated to Iowa. Shortly after that, she moved back to Arizona for health reasons. Once in Arizona, she wrote to her husband to ask his help in segregating her assets and returning them to her separate name; after consulting with his attorney, Catto refused to cooperate. In fact, he filed the “community property and survivorship agreement” with the County Auditor (Washington’s version of the County Recorder).

When Catto refused to help undo the community property arrangement, Hansen became angry. She executed a will disinheriting her husband on January 18, 1993. At the same time, she signed a deed distributing her one-half interest in the Colorado property to herself, in an attempt to destroy the joint tenancy designation of the property and return at least her half interest to separate property status. One week later, she filed for divorce in Arizona.

The day after her divorce was filed, Hansen died. Catto filed her will with the Washington probate court, but argued that there were no assets in her estate because of the survivorship agreement. Under Washington law, survivorship agreements between husband and wife can usually be enforced even though the spouses may make wills or otherwise attempt to circumvent the agreement.

Hansen’s heirs argued that the agreement should not be enforced, and that Hansen should be permitted to disinherit her husband. They argued that the marriage was “defunct,” and that the agreement was inherently dependent on the couple being married in fact as well as law at the time of Hansen’s death. Not only was the marriage “defunct,” according to Hansen’s heirs, but Catto abused her and she should have the power to unilaterally terminate the community property agreement.

After the trial court ruled that the agreement was still enforceable, Hansen’s heirs appealed to the Washington Court of Appeals. That court agreed with the trial judge, and ordered that all of Hansen’s property must go to Catto. The appellate court determined that one party to such an agreement may not unilaterally rescind it, and that even if the marriage was “defunct” nothing in the agreement led to the conclusion that it would be revoked. Estate of Catto, September 26, 1997.

©2017 Fleming & Curti, PLC