Eldon H. Reiley, Community Property v. Contracts: A Domestic Conflict of Law Being Waged by the Washington Wife, 1 Gonz. L. Rev. 1 (1966)
When Corrine Powers decided to challenge her husband ‘s attempt to designate his secretary and his mother as beneficiaries of his life insurance, she stirred up a legal mud puddle that has clouded the development of community property law in Washington since 1937.
Each succeeding application of the Powers Rule – i.e., that the wife may void the designation of someone other than herself as beneficiary of community-owned life insurance and recover all the proceeds – has further darkened the legal waters. The impact of this rule has spread from insurance to pension plans, to savings bonds, to joint tenancy. It is the principal basis of current conceptions and misconceptions about the nature and extent of the Washington wife ‘s interest in community property.
The extent of uncertainty surrounding the Washington wife ‘s community property interest has recently been startlingly spotlighted by the United States Supreme Court. In Yiatchos v. Yiatchos, the result turned on whether the surviving wife had an undivided interest in each individual community asset or whether her interest was, instead, in the community property as a whole. The majority was unable to determine Washington law on this point. Mr. Justice Clark, however, joined by Mr. Justice Douglas, dissented, stating : ”The proposition that a spouse has such an interest in each item is of doubtful validity and there is no Washington authority to support it. “
The difficulty experienced by the United States Supreme Court in determining Washington law reflects a failure of Washington case law since 1937 to consistently or coherently apply community property principles toward a definition of the wife ‘s interest.
This article is written in the firm belief that Washington law should not continue to be erected on a foundation, i.e., the Powers Rule, that is demonstrably fallacious, palpably unfair, inconsistent with the law in other community property jurisdictions, and which has now been rejected by the Supreme Court of the United States. It is long past time for a thorough re-examination and restatement of the rules with respect to the rights of the wife in community proprty. This article focuses on one aspect of the problem – the wife ‘s rights when the husband ‘s disposition of property by contract conflicts with community property principles.