[WSBAPT] UK Citizens w/ US Real Estate

Fri Nov 14 08:26:24 PST 2014

Nostalgia strikes!  My small wedding reception was held at Benjamin’s on May 18, 1991.

Sorry. I didn’t know any of you then.

GDP

Glenn D. Price, J.D.
Price & Farrington, PLLC
Attorneys and Counselors at Law

GlennPrice227_small   WC-Member-Logo-Founding

Parkwood Office Center
2370 130th Avenue N.E., Suite 103
Bellevue, Washington 98005
Phone: 425.451.3583  Fax: 425.522.4818

Email:  <mailto:glenn at pricefarrington.com> glenn at pricefarrington.com
Home page:   www.pricefarrington.com <http://www.pricefarrington.com/> 

Estate, Tax, Retirement and Asset Protection Planning

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Karen Perret
Sent: Friday, November 14, 2014 7:32 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] UK Citizens w/ US Real Estate

Before Prego, the restaurant up there, in the then Seattle Trust building was Benjamin's. Good to know if you're looking to an "older" Bellevue clientele. It was a very cool place to see and be seen.

Karen

Sent from my iPad

On Nov 13, 2014, at 9:00 PM, "John J. Sullivan" <sullaw at comcast.net> wrote:

Final days, Sam. Moving the office to downtown Bellevue next weekend. Looking forward to cutting our commutes and monthly parking bills in half. 

We've had a good run here the last eight years at 1111, which lost 11 floors of WAMU employees in '09 and as far as I know still is only half occupied. Our rent was flat the whole time - right through receivership. As seems to be the fad around town the buyers out of receivership sunk a little capital into things - retro lobby looks like a set from Mad Men, gym, showers for the half dozen bicycle commuters. All trying to reclaim their Class A status (and, presumably, hold on to Foster Pepper up at the top). They're trying to flip the building to new owners as I type. We'll see. 

They didn't want to renew us. We think they hope the stairway to 29 next door where WAMU's payroll dep't used to be will attract a big two floor tenant. We'll see. 

We're taking a somewhat smaller space in the old Key Bank Building on 4th and 106th. (We have one extra office to sublease if anyone's interested.) Used to have an Italian restaurant named Prego up top back in the day. It'll be back to the future. Spent three years in the late '80s in the BLV office office of my first firm in the Symetra Building. Moving is a great opportunity to clean out stuff. 

And I was out celebrating with my fellow veterans - you did notice it came from my iPhone. 

And that's probably why my first response was so inadequate! 

John Sullivan

Sent from my iPhone

On Nov 13, 2014, at 4:23 PM, Sam Furgason <sam at furgasons.com> wrote:

All days are becoming pretty much the same for me, except Sundays (that’s when my 86 year old neighbor gets P O’d if I run my lawn mower). I think John offices downtown, high in the atmosphere in class A space, so he has to pay the Seattle rents, which means he has to work holidays, evenings and weekends. In my next life my goal will be to own one or more of those buildings. That grass looks awfully green from my perspective. 

S  

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Roger Hawkes
Sent: Thursday, November 13, 2014 2:21 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] UK Citizens w/ US Real Estate

Agreed; but how come you guys are all working on a Holiday!!  You are old enough to know better!!

Roger Hawkes, WSBA # 5173

19909 Ballinger Way NE

Shoreline, WA 98155

www.hawkeslawfirm.com

206 367 5000

Fax is 206 367 4005

From: John J. Sullivan [mailto:sullaw at comcast.net] 
Sent: Tuesday, November 11, 2014 10:59 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] UK Citizens w/ US Real Estate

A very thorough and wise contribution. Thanks Sam. 

John Sullivan

Sent from my iPhone

On Nov 11, 2014, at 10:43 PM, Sam Furgason <sam at furgasons.com> wrote:

Felicia,

First, these people are asking you because you are a lawyer, not just a friend. Their questions are about legal matters. If you undertake to give them advice, whether directly or through forwarded comments by others, you have become their attorney on this matter. I’m sure they may treat this as a simple question, but really, casual advice yields casual results. Good advice would be to tell them that this is a matter of some complexity, and should merit their getting serious advice. I’d hazard a guess that they would appreciate and respect such a response. 

No one who has answered has any real idea where this real property is located, how large or small your friends’ estate is, what the real property is worth, and probably little idea about UK law. And you’re willing to pass their lawyer to lawyer suggestions on to your friends for them to make life decisions on? I wouldn’t. 

For example, Washington estate tax law looks at the entire estate of a decedent when determining whether an estate tax is owed. If the entire estate exceeds the taxable exemption, then an estate tax is imposed, the amount of which is in proportion to the portion of their estate which is located in Washington. So if they have property which is deemed located in Washington, and one of them dies, then at a minimum a determination will have to be made whether that decedent’s entire estate exceeds the inflation-adjusted $2,000,000 Washington exemption at the date of death. Under British law, the answer to that question could depend on which spouse dies, as England does not, to my belief, have community property law. 

They should consider whether it would be advantageous to hold the property in an entity which would be deemed intangible personal property, as such property is considered located where the owner is domiciled, under Washington estate tax law. Also, entitizing the property to make it intangible personal property, and then having the first decedent’s portion pass to a trust could both reduce the estate tax value of the interest passed (assuming it is less than a controlling interest), and remove that interest from Washington for Washington estate tax purpose. 

However, what if re-locating the real property, so to speak, to the law of the domicile actually creates a disadvantageous death tax situation? 

Another consideration is that the U.S. property of persons who are non-resident noncitizens is treated differently from that of residents and citizens. 

Then you have to recognize that a U.S. trust must have at least one U.S. trustee, in order to avoid certain tax consequences relating to recognition of taxable gains. So, if your friends/clients (remember, they are clients if you provide them with any legal advice, whether by forwarding answers form this list or otherwise) find that using a trust to hold the property is advantageous, they will have to consider how to deal with the U.S. person issue. [Note to “friends:” I am not your attorney, and if you read this I am not offering it as legal or tax advice. I recommend you contact legal counsel who can gather all the relevant facts and provide informed advice.]

My suggestion would be that if this seems too complex for you to educate yourself on, so that you can give them useful advice, then simply tell them this issue involves international complexities and tax issues which they should consult with knowledgeable counsel about. Or, you could just as well say that you can handle this but you will have to do some research on it, and give them your hourly rate, as well as agreeing on an amount they can agree to pay before re-evaluating. The lawyers in the big firms charge by the hour to educate themselves (or their junior associates) on these issues; it is not as though they come out of law school knowing everything. They develop expertise by learning while getting paid. If it’s over your head, either consult with someone who has expertise, or refer them to some such attorney. Who knows? You may become a local expert on this narrow field. Of course, that would mean you’d have to become a CLE presenter and article writer, etc. 

Those are my thoughts. 

S 

Samuel L. Furgason

Samuel L. Furgason, Inc, PS

Law Practice Limited to Existing Clients

800 Bellevue Way N.E., Suite 400

Bellevue, Washington 98004

MAIL TO:

PO Box 102

Medina, WA 98039-0102

Work:    (425) 649-1122

Cell:       (425) 445-9909

Email: sam at furgasons.com

From: wsbapt-owner at lists.wsbarppt.com [mailto:wsbapt-owner at lists.wsbarppt.com] On Behalf Of Felicia Value, Attorney at Law
Sent: Tuesday, November 11, 2014 1:40 PM
To: WSB Listserv
Subject: [WSBAPT] UK Citizens w/ US Real Estate 

Hello Colleagues:

I have a question on behalf of some friends. They are UK citizens with their primary residence in the UK. They own some property in the US that they want to leave to their daughter.  Do they need a US Will to do that?  Is there some sort of ancillary proceeding that you open in the US to administer the property, even if the primary probate proceeding is in the UK?  I suppose they could add the daughter to the title as a co-owner with right of survivorship, but for exposure reasons I’m never crazy about that idea.  Should I tell them to consult US counsel,  or is this really simple and can just be dealt with easily in the administration of the UK Will?

I will forward your responses directly to my friends.  Thanks for any thoughts.

Sincerely,

Felicia Value
Attorney at Law
PO Box 578/116 North Third Street
La Conner, WA 98257
(360) 466-2088
 <http://www.skagitprobate.com> www.skagitprobate.com

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