[WSBAPT] Can TEDRA Modify Will Provisions

Wed Jun 3 10:48:31 PDT 2015

Doug, FWIW, I think your plan is fine and it's manageable via TEDRA, so long as the oldest son as Trustee of the Trust will acknowledge that if the trust were actually implemented, he would simply drain the entire trust and distribute everything to the surviving spouse directly.

This isn't really a "dispute" resolved, so much as an acknowledgment by all parties that they are skipping some formalities to achieve a result that they all agree is proper, and allowed even under the terms of the Trust itself. I think TEDRA can do that.

Could you accomplish the same thing by simply doing two deeds? Estate to Trust, then Trust to surviving spouse? First is REET exempt by inheritance, second is REET exempt under WAC 458-61A-210(1)<http://app.leg.wa.gov/WAC/default.aspx?cite=458-61A-210>. The only disadvantage there would be, you don't have signatures by the other heirs agreeing that Trustee is acting within his powers as Trustee to distribute all immediately. So maybe TEDRA is better because it confirms everyone is on board with the plan.

Sincerely,

Eric

Eric C. Nelsen
SAYRE LAW OFFICES, PLLC
1320 University St
Seattle WA  98101-2837
phone 206-625-0092
fax 206-625-9040

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Douglas Bratt
Sent: Tuesday, June 02, 2015 8:21 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] Can TEDRA Modify Will Provisions

I got one response on-list (from James Jackson).  I have received no responses, off-list.

I would welcome any other responses anyone of you might offer.

Regards,

Doug

Douglas J. Bratt
Lawyer

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From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Paul Neumiller
Sent: Monday, June 01, 2015 4:07 PM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] Can TEDRA Modify Will Provisions [text]

Doug, did you get any responses off-list to your post?  I haven't seen any answers posted to the list.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Douglas Bratt
Sent: Thursday, May 28, 2015 5:23 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Can TEDRA Modify Will Provisions

Hello Listmates:

Husband and Wife have three sons, all over the age of majority.

Husband (considerably older) and Wife signed wills, both with testamentary provisions putting their respective interests in the family home into an irrevocable Trust, for the benefit of the survivor, with their oldest son named as Trustee.  Unfortunately, no Community Property Agreement was entered into.

Husband died.  Probate not yet filed.  Currently, Wife owns half of house, outright, and the other half, if the will is followed, will be in Trust for benefit of Wife.

Language appears to be as would be used in a Special Needs Trust, indicating that Trustee can pay Wife's expenses, "but only such expenses over and above the ones which would be paid by any local, state, or federal government or from any private or public profit or non-profit organization if the trust and its assets were not in existence."

A further provision states that if the beneficiary is not receiving gov't benefits, based upon need or disability, "the trustee shall have the absolute and sole discretion to determine what disbursements shall be made from the trust estate for the beneficiary's benefit."

Wife has no medical issues and is unlikely to have any such issues for quite some time, based upon her present age.

Question is whether or not the Wife, and her three sons (the ultimate beneficiaries) can enter into a TEDRA Agreement, right at start of probate, to allow for wife to directly receive the husband's half of the house instead of having to set up the trust and then having the Trustee decide that a full disbursement from the Trust shall be made for beneficiary's benefit, since she is not receiving gov't benefits based upon need or disability when that transfer takes place.  Seems like too many complications involved with getting to the goal (of full ownership by Wife) if the Trust has to be established per the Will.

Wife and all three sons are in full agreement that she should have full ownership of house.

What say ye, old (and young, and in-between) wise ones?

Regards,

Doug Bratt

Douglas J. Bratt
Lawyer

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TAX ADVICE NOTICE: IRS Circular 230 requires us to advise you that, if this communication or any attachment contains any tax advice, the advice is not intended to be used, and cannot be used, for the purpose of avoiding federal tax penalties. A taxpayer may rely on professional advice to avoid federal tax penalties only if the advice is reflected in a comprehensive tax opinion that conforms to stringent requirements. Please contact us if you have any questions about Circular 230 or would like to discuss our preparation of an opinion that conforms to these IRS rules.

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