[WSBAPT] Allocation of community assets between survivor and trust

[Marcus Fry]

H needs to disclaim in order to avoid having 1.83mil allocated to his
estate.  Also, in order to preserve the step up on H’s death and 121
exclusion on sale of residence (I’m assuming from the facts you were
planning to place residence in trust), what about note from husband to
trust for $510k secured by lien against residence.  Pay the note with RMDs
from IRA.  

 

Marcus J. Fry

Lyon, Weigand & Gustafson, P.S. 
Adoption Attorney*

P.O. Box 1689 
Yakima, Washington  98907 
Telephone:  (509) 248-7220 
Facsimile:  (509) 575-1883 

 

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From: wsbapt-owner at lists.wsbarppt.com
[mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Donna Calf Robe
Sent: Wednesday, February 26, 2014 5:35 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Allocation of community assets between survivor and
trust

 

Greetings:

H&W have $3.1 million in community assets.  Of that amount, $1.5 million
are held in retirement accounts in H’s name.  The home was held in both
names and worth $510K.  $760K is held in joint mutual fund and money
market accounts with no beneficiary designation so ½ ($380K) passes to the
estate.  The remaining $330K is held in JTWROS mutual funds and savings
accounts.  

 

W dies and in her Will leaves her estate to a spousal trust (unified
credit trust) for the benefit of H.  The retirement accounts go on H’s
side of the ledger.  He would also like to retain $50K from the JTWROS
accounts, but would like everything else to go the marital trust. So he
would have $1,050,000 in his name and $1,050,000 in name of trust.

 

It is my understanding that since each spouse owns an undivided one-half
interest in all community property, we can do a non-prorata distribution,
regardless of how the property is titled.    Because the majority of the
community assets are in H’s name in retirement accounts, and W had no
ability to direct those funds, can we even out the distribution by putting
all of the joint funds into the trust? (I think so) How about the JTWROS
accounts? (not so sure).  He has time to disclaim if that will help but
I’ve never done that with a JTWROS account.  If JTWROS accounts can’t go
into trust, it won’t be a huge problem because his estate will still be
below the $2 million mark, but he is healthy and frugal and it could grow.
Thanks in advance for your time.        

 

Donna

 

Donna M. Calf Robe

Attorney at Law

2722 Eastlake Avenue East, Ste 200

Seattle, WA 98102-3143

206-324-4300, ext. 113

206-324-3106 (fax)

 <mailto:donnac at dussaultlaw.com> donnac at dussaultlaw.com

 

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