Ms. Singleton laid out the issues well. You should consult with a probate attorney.See question
Mr. Walk explained it well, and you should consult with a probate attorney.See question
This is a far bigger question than just asking for the WAC exemption. You should consult with an attorney that practices estate planning and/or with an accountant to see if this makes sense. While Washington state does not currently have a gift tax, there is a gift tax at the federal government level. US Citizens do have a large federal estate and gift tax exemption which is currently $11.4 million per person, but you need to know if your parents have used any of that exemption up yet. Gifts are reported on Form 709 each year and either reduce your federal exemption or if this has already been used up then gift tax is owed. There is also an annual gift tax exemption of $15,000 per person per year.
Another item to consider, is that the recipient of a lifetime gift takes the carry over basis of the giver. Whereas, in a bequest at death, the recipient receives a stepped up basis to the fair market value at the time of death. For example, if your parents gift the house to you during lifetime and their basis is $150,000 than that is the basis you will have in the property when you go to sell it in the future (absent any additional capital improvements). Therefore, you sell if for $600,000 than you will have a capital gain of $450,000 that is subject to capital gains tax. In the same scenario for values, your parents die and bequeath it to you then you will receive a stepped up basis to the fair market value at the time of death, which for purposes of this illustration is $600,000, then you sell it for $600,000 there is no capital gain and no capital gains tax.
A discussion with an estate planning attorney and/or your accountant is very appropriate so you and your parents can make an informed decision. Depending upon what you are trying to accomplish, there may be other planning opportunities to discuss such as transfer on death deed, gift with reservation of life estate, etc. An estate planning attorney and/or accountant would be able to guide you through this process.
You may need to file a probate and obtain Letters Testamentary for further investigation. However, first you should review the Navy Federal Credit Union bank account agreement as well as the Navy Federal Credit Union credit card agreement. I have found that most banks and credit unions cross-collateralize the bank accounts and credit cards/outstanding loans. What this means, is that when a person dies or is in default then the bank or credit union can according to their agreement take the funds they are holding and apply it to the debt they are owed. You should consult with an attorney that practices in the probate area as there are procedures for creditor claims that a bank may be subject to, but if the cross-collateralization is in their agreement then this is a contract right and it may trump the probate creditor claim process.See question
Mr. Loran provided the correct roadmap if it is a living trust/revocable trust or a testamentary trust under a Will. You should contact a trust and estate attorney as soon as possible to discuss this matter further.See question