[WSBAPT] living trust beneficiary questions
Marcus Fry
mfry at lyon-law.com
Tue Apr 1 11:15:31 PDT 2014
Heather:
I would make sure to advise your client that it is not probate that causes
the issue, but the people. I actually probably engage in twice the amount
of trust litigation as opposed to probate litigation. I think it is
because layman trustees generally think they can go it alone and believe
they are endowed with some greater authority beyond the terms of the
trust, and therefore, can do whatever they want regardless of what the
document says.
As to your question if you keep the trust, my question is what does your
client want Child #3 to have exactly. If Child #1 and Child #2 outlive
Child #3, what will Child #3 ever really receive as to the real estate?
If Client doesn’t care that Child #3 may never see the proceeds from the
real estate, then leave the real estate outright to #1 and #2. However,
due to the fact that you indicated that there are significant financial
resources, why don’t you put in a provision that if any of the Children
exercise the right to live in the home, that property will be valued at
time of death and the other children will get an equalizing distribution
of cash and if not enough cash, a lien against the property in their
favor.
Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Heather Kolbly
Sent: Tuesday, April 01, 2014 11:05 AM
To: wsbapt at lists.wsbarppt.com
Subject: RE: [WSBAPT] living trust beneficiary questions
Thank you, everyone for your replies – you’ve been very helpful. The
properties are in Thurston Co., so I will check local ordinances there
concerning testamentary subdivision.
Another question: Client specifically wants to avoid probate, since the
family has gone through 2 very messy probates previously, so that’s why I
suggested a revocable living trust as a way of avoiding probate and
preserving assets for the kids. They HATE the idea of probate because of
their bad experiences with it. I will present your input to the client to
see if she wants to have the property subdivided via testamentary
disposition. However, if she still really wants to avoid probate and have
the living trust (which I expect), do you have any ideas on how to handle
the beneficiary’s gifts? All 3 adult kids get along well and are ok with
whatever Client (their mom) wants to do with her property, even if it
results in an unequal distribution. Is it conceivable to place Parcel #1
(with 2 houses on it) and Parcel #2 in trust to benefit all three kids as
beneficiaries, and provide that Client wishes for Child #1 to remain in
her home and Child #2 to remain in his home, even though the properties
are to benefit all 3 kids? This would mean the two living in trust
property homes would need to pay rent to the remaining siblings – is this
right?
Sorry if this is confusing….I always get clients with the most interesting
issues….
Many thanks again,
Heather Kolbly
Kolbly Law Firm, P.C.
peace of mind through planning
Wills - Trusts - Powers of Attorney - Medical Directives
Prenuptial/Postnuptial Agreements
Small Business Law - Contracts - HOA Representation - Guardian ad Litem
Heather Tobin Kolbly
Attorney and Counselor at Law
Mail: 704 228th Ave. NE #122, Sammamish, WA 98074
Office: (425) 522-4234 s Cell: (425) 444-1888
<mailto:Heather at KolblyLaw.com> Heather at KolblyLaw.com
<http://www.kolblylaw.com/> www.KolblyLaw.com
Hours: By appointment only, including evenings and weekends.
Housecalls and "workcalls" are our specialty!
Speaking engagements: I am happy to come to your office, club, church,
neighborhood or other gathering FREE OF CHARGE to provide information on
the uses of estate plan documents (Wills, Trusts, Powers of Attorney,
Advance Healthcare Directives, Community Property Agreements, and
Declarations Regarding Organ Donation and Disposition of Remains) and
answer any questions.
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From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Vashonlaw
Sent: Monday, March 31, 2014 4:17 PM
To: wsbapt at lists.wsbarppt.com
Subject: Re: [WSBAPT] living trust beneficiary questions
Heather see RCW 58.17.040 which exempts certain divisions of property from
subdivision laws when made by testamentary provisions. Check your local
county ordinances to see if that means the division must be done by will.
The Sammamish cite is 19A.08.070.
RCW 58.17.040
Chapter inapplicable, when.
The provisions of this chapter shall not apply to:
(1) Cemeteries and other burial plots while used for that purpose;
(2) Divisions of land into lots or tracts each of which is one-one
hundred twenty-eighth of a section of land or larger, or five acres or
larger if the land is not capable of description as a fraction of a
section of land, unless the governing authority of the city, town, or
county in which the land is situated shall have adopted a subdivision
ordinance requiring plat approval of such divisions: PROVIDED, That for
purposes of computing the size of any lot under this item which borders on
a street or road, the lot size shall be expanded to include that area
which would be bounded by the center line of the road or street and the
side lot lines of the lot running perpendicular to such center line;
(3) Divisions made by testamentary provisions, or the laws of
descent;
Margaret L. Koch
Smith and Koch
PO Box O
Vashon, WA 98070
206-463-9491
206-463-3405 (fax)
vashonlaw at aol.com
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-----Original Message-----
From: Heather Kolbly <heather at kolblylaw.com>
To: wsbapt <wsbapt at lists.wsbarppt.com>
Sent: Mon, Mar 31, 2014 3:29 pm
Subject: RE: [WSBAPT] living trust beneficiary questions
Hi All,
Client is an elderly woman who would like a revocable living trust. She
will be the initial beneficiary and her 3 grown children are the remainder
beneficiaries. All 3 children are to receive equal interest in all trust
property, which will include significant bank account sums and 2 parcels
of real property. Parcel #1 consists of 3+ acres and has 2 houses on it;
Client lives in one house and Child #1 lives in the other house. Both
have lived there for decades, even though the property is in Client’s name
and the name of her recently deceased husband (the father of all 3 kids).
Client wants Child #1 to remain in her home for the rest of her life if
she so chooses. Parcel #2 is currently being purchased by Client (in her
name alone), but it is for Child #2 (and his wife) to live in for the
duration of Child #2’s life if he so chooses. Parcel # 1 is owned
outright with no mortgage. Parcel #2 will be owned outright with no
mortgage once the sale is complete. Client wants her living trust to hold
the real properties for all 3 kids as beneficiaries, although Child # 1 is
to remain in her house on Parcel #1, and Child #2 is to reside in his
house on Parcel #2. I am thinking that if all 3 kids are beneficiaries,
the 2 who are benefiting from residing in 2 of the houses would need to
pay a share of rent to Child #3 who has her own home and will not reside
in any of the 3 houses on the 2 real properties to be held in trust. Is
this the case, or can I just draft the trust stating that the child
residing in any of the trust houses is responsible for paying all taxes
and other costs associated with the property the respective child resides
in, and that no rent payments are due to any other beneficiaries? I am
thinking that the easiest way of dealing with this may be to allow Child
#3 to reside in the house Client currently resides in after she dies, and
if Child #3 doesn’t want to live there, she (or the trustee, actually) can
rent it out. The problem here is that 2 of the houses are one 1 single
large parcel, which cannot be divided due to zoning.
Any ideas on how to carry out Client’s wishes in the easiest manner, which
basically are that all 3 kids are equal beneficiaries regarding the
“ownership” of the properties (through the trust), but that 2 of the kids
get to stay in their respective homes held by the trust (trustee) for the
rest of their lives (roughly another 30 or so years)?
Another question: All property was community property prior to husband’s
death. There was no probate and the deed to Parcel #1 is still in husband
and wife’s names. How do I go about transferring the deed from husband
and wife to just wife’s name so she can put it in the trust? Can this be
done without opening a probate proceeding?
Many thanks,
Heather Kolbly
Kolbly Law Firm, P.C.
peace of mind through planning
Wills - Trusts - Powers of Attorney - Medical Directives
Prenuptial/Postnuptial Agreements
Small Business Law - Contracts - HOA Representation - Guardian ad Litem
Heather Tobin Kolbly
Attorney and Counselor at Law
Mail: 704 228th Ave. NE #122, Sammamish, WA 98074
Office: (425) 522-4234 s Cell: (425) 444-1888
<mailto:Heather at KolblyLaw.com> Heather at KolblyLaw.com
<http://www.kolblylaw.com/> www.KolblyLaw.com
Hours: By appointment only, including evenings and weekends.
Housecalls and "workcalls" are our specialty!
Speaking engagements: I am happy to come to your office, club, church,
neighborhood or other gathering FREE OF CHARGE to provide information on
the uses of estate plan documents (Wills, Trusts, Powers of Attorney,
Advance Healthcare Directives, Community Property Agreements, and
Declarations Regarding Organ Donation and Disposition of Remains) and
answer any questions.
CONFIDENTIALITY: This e-mail and its attachments are confidential and may
be protected by attorney/client privilege, work product doctrine, or other
nondisclosure protection. If you are not the intended recipient of this
e-mail, please contact the sender immediately; you may not read, disclose,
print, copy, store or disseminate the e-mail or any attachments or any
information contained therein.
IRS CIRCULAR 230 DISCLOSURE: To ensure compliance with new requirements of
the Internal Revenue Service, we inform you that, to the extent any advice
relating to a Federal tax issue is contained in this communication,
including any attachments, it was not written or intended to be used, and
cannot be used, for the purpose of (a) avoiding any tax related penalties
that may be imposed on you or any other person under the Internal Revenue
Code, or (b) promoting, marketing or recommending to another person any
transaction or matter addressed in this communication.
_____
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Information provided on this list should not be considered legal advice.
As with all lists - let the reader beware! No warranties or
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author and do not necessarily have the endorsement of the Washington State
Bar Association nor its officers or agents.
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