[WSBAPT] Real Property in Trust to subtrusts - deed?

[Paul H. Grant]

Eric,

My concern is that although the trustee is the same individual now that may not be the case in the future when it is time to actually sell the property. From your previous comment, it appears that there is not sufficient cash to equalize the trusts without splitting the home.  I would imagine that there are mortgage powers to the trustee so another thought is to have the trustee mortgage the home for cash to increase the ability of funding one trust or the other without splitting the home.

I would think that splitting a home between two beneficiaries' trusts would really not be beneficial in the long term. It may promote additional bookkeeping with determining rents, insurance, upkeep, repairs, trustee fees, etc.  I would even favor having an agreement from one trust to the other trust of a loan versus splitting the house. The loan could even be secured on the home even if there is already a mortgage.

Would all of the beneficiaries of the family trust sign off so that the surviving spouse can simply take all of the assets and retain them in the revocable trust?

Maybe one of these ideas will spur other thoughts for you. Good luck!

Sent from my iPhone ~ Paul H. Grant

> On Jan 7, 2015, at 3:44 PM, Eric Nelsen <Eric at sayrelawoffices.com> wrote:
> 
> Married clients had a joint RLT that directs, upon first to die, transfer of decedent's assets into a "Trust B" and survivor's assets into a "Trust A." Multiple kids are the final beneficiaries, and there is a potential troublemaker who is a remainder beneficiary of only one of the subtrusts.
>  
> My plan is to do an actual deed, from Trustee of the original RLT to that same Trustee as to Trust A and as to Trust B, to put one-half of the real property in Trust A and one-half into Trust B.
>  
> Ordinarily I might think this a little overkill since both trusts are administered by the same Trustee and the "transfers" into the subtrusts could just be done administratively, internal to the Trust instrument. But because there's a potential troublemaker and a difference in remainder beneficiaries between Trust A and Trust B, I am inclined to put a deed into the public record showing the real property has been split between the two trusts.
>  
> Anyone have any thoughts about this? Am I worrying too much, or worrying not enough?
>  
> Thanks in advance--
>  
> Sincerely,
>  
> Eric C. Nelsen
> SAYRE LAW OFFICES, PLLC
> 1320 University St
> Seattle WA  98101-2837
> phone 206-625-0092
> fax 206-625-9040
>  
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