[WSBAPT] living trust beneficiary questions

Mon Mar 31 15:27:06 PDT 2014

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

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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 

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