[WSBAPT] Can TEDRA Modify Will Provisions

Wed Jun 3 14:32:41 PDT 2015

Tom’s response is well put and summarizes the intent of TEDRA directly and simply.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Thomas M. Culbertson
Sent: Wednesday, June 03, 2015 9:43 AM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] Can TEDRA Modify Will Provisions

I’ll weigh in.

Simple answer – yes you can use a TEDRA agreement to do what you want to do.

More nuanced answer – You’re not really modifying the terms of will (they were cast in stone when the testator died).  What you’re doing is having everyone with an interest in the estate agreeing to a distribution of the estate contrary to the terms of the will.  If everyone who has an interest in the estate agrees and signs on, who’s there to complain?  Well, potentially the IRS. And it has no reason to complain, but if it believes that an interested party relinquished a valuable property right, then it will treat the agreement as a taxable gift.  But depending upon the financial situation of the remainder beneficiaries (I’m assuming that’s the kids), the fact that they may have made a gift to Mom may be of no concern.

________________________________________
THOMAS M. CULBERTSON  I  Lukins & Annis, PS
717 W. Sprague Ave, Suite 1600, Spokane, WA 99201
(509) 455-9555  I  fax (509) 363-2500  I  tculbertson at lukins.com<mailto:tculbertson at lukins.com>

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: 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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