[WSBAPT] QTIP Trust Estate Tax problem

[Sharon English]

I’m curious if any of you smart folks have dealt with this scenario and
how you handled it:

 

My client is a successor trustee of a QTIP trust.  The original
trustee/beneficiary (surviving spouse, client’s step-mother) passed away
last year.  The PR for the surviving spouse’s estate (client’s
step-brother) has not completed an estate tax return, and after many
months of pestering, it doesn’t look like he will be doing one anytime
soon.  My client does not believe there will be any WA state estate taxes
owed for the surviving spouse’s estate (due to most of the estate
qualifying for the farmland deduction), however, without the tax return
being filed, we can’t be certain.  She obviously does not have legal
authority to file the estate tax return, since that is the PR’s duty.  She
would like to distribute the remaining trust funds, but is concerned about
any potential personal liability for distributing funds without proof that
the estate tax return was completed.  (In case it wasn’t obvious, this is
a blended family where no one really gets along.)

 

The client does not want to spend too much time and money fighting about
this, since everyone involved seems fairly certain there would not be any
estate taxes due, however, we want to protect her as much as possible from
any liability.  

 

Any insights would be most welcome…

 

Thank you.

 

 

Sharon English

Attorney at Law

YOUNGLOVE & COKER, P.L.L.C.

1800 Cooper Point Road SW #16

Olympia, WA 98502

(360)357.7791 (phone)

(360)754.9268 (fax)

 

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