[WSBAPT] SNT and IRAs

[Marcus Fry]

Agree with John, but in my estate planning I don't casually throw in SNTs.  Also, even if you don't need the SNT, if you aren't familiar with IRAs and situations where the estate is named as beneficiary, you might want to associate with someone who does over in your neck of the woods to see if you cannot get a stretch out over life expectancy of surviving spouse and possible treatment as a rollover IRA (double stretchout!)

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
Adoption Attorney*
P.O. Box 1689
Yakima, Washington  98907
Telephone:  (509) 248-7220
Facsimile:  (509) 575-1883

NOTICES:
 *Adoption Attorney reflects election as a Fellow of the American Academy of Adoption Attorneys, an invitation based organization of 300+ attorneys nationwide, under its criteria of experience, ethics and peer recommendation. Washington's Supreme Court has not yet developed or recognized a credentialing process for specialties, and certification/fellowship is not required to practice law in this state.
Confidentiality: This e-mail transmission may contain information which is protected by attorney-client, work product and/or other privileges.  If you are not the intended recipient, you are hereby notified that any disclosure, or taking of any action in reliance on the contents, is strictly prohibited.  If you have received this transmission in error, please contact us immediately and return the e-mail to us by choosing Reply (or the corresponding function on your e-mail system) and then deleting the e-mail.

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of John Creahan
Sent: Wednesday, May 06, 2015 2:22 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] SNT and IRAs

Paul,
I agree that this is a potentially complex situation, but that complexity arises is primarily caused by the supplemental needs issues.
Determining whether the surviving spouse is really going to need Medicaid will likely clarify your client's best path forward. If Medicaid is not a substantial concern, his situation becomes much simpler - the survivor can take possession of the IRA accounts (which will probably produce a better income tax result than putting them in the trust), and disclaim the other assets (or not).
Hope this helps,
John

John Creahan
john at cairn-law.com<mailto:john at cairn-law.com>
1325 4th Ave., Suite 940
Seattle, WA 98101
206-621-5848
www.cairn-law.com<http://www.cairn-law.com/>
[cid:image001.png at 01CE636C.3EB992D0]

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: Wednesday, May 6, 2015 2:07 PM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] SNT and IRAs

OK, OK.  Uncle Uncle.  If I can't even get the questions right, then I am waaaaay over my head in this area of the law and I plan to refer the PR for advise in this matter.  Thanks to all who attempted to save me (and my malpractice carrier) from myself.



From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Marcus Fry
Sent: Wednesday, May 6, 2015 11:23 AM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] SNT and IRAs

Yes, Medicaid considers a disclaimer as a gift. 42 U.S.C. 1396p(e) provides that the term "assets" used to determine income and resources of an individual or the individual's spouse includes any income or resources which the individual "is entitled to but does not receive because of action by any person, including any court or administrative body, acting at the direction or upon the request of the individual or such individual's spouse."  Washington State construes "action" to occur when one disclaims.

The one issue I am unsure of the answer to, is that a third party SNT created by a deceased spouse's will, if one disclaims and the result is that it goes to this SNT, is this "transfer/disclaimer" to trust that Medicaid considered an exempt transfer.

Also, if the IRAs didn't name a beneficiary, you are under a 5-yr pay out period anyway assuming W didn't die after 70 ½.  Thus, it may be better to cash them out, take the tax hit and divide one-half to H and one-half to W.   H may have some offsetting medical expenses to reduce the tax hit too!

Really complex situation Paul.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
Adoption Attorney*
P.O. Box 1689
Yakima, Washington  98907
Telephone:  (509) 248-7220
Facsimile:  (509) 575-1883

NOTICES:
 *Adoption Attorney reflects election as a Fellow of the American Academy of Adoption Attorneys, an invitation based organization of 300+ attorneys nationwide, under its criteria of experience, ethics and peer recommendation. Washington's Supreme Court has not yet developed or recognized a credentialing process for specialties, and certification/fellowship is not required to practice law in this state.
Confidentiality: This e-mail transmission may contain information which is protected by attorney-client, work product and/or other privileges.  If you are not the intended recipient, you are hereby notified that any disclosure, or taking of any action in reliance on the contents, is strictly prohibited.  If you have received this transmission in error, please contact us immediately and return the e-mail to us by choosing Reply (or the corresponding function on your e-mail system) and then deleting the e-mail.

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Roger Hawkes
Sent: Wednesday, May 06, 2015 10:46 AM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] SNT and IRAs

This raises the question for me of whether a disclaimer by a Medicaid recipient is considered an asset gift when disclaimed.  Who knows that?

Roger Hawkes, WSBA # 5173
19909 Ballinger Way NE
Shoreline, WA 98155
www.hawkeslawfirm.com<http://www.hawkeslawfirm.com>
206 367 5000
Fax is 206 367 4005

From: Marcus Fry [mailto:mfry at lyon-law.com]
Sent: Wednesday, May 06, 2015 10:28 AM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] SNT and IRAs

Paul:
The facts are bit confusing.  When you state non-probate assets you are not including the IRAs, correct?  You are talking about checking, savings and other accounts, correct?  If so, the problem in this situation is that H is automatically vested on death with the non-probate assets assuming he is either JTWROS or a beneficiary.  If he disclaims, that will have impact on Medicaid eligibility assuming he is either on Medicaid or will be on Medicaid in the next 5 years.  However, if the non-probate asset was just in wife's name and payable to the Estate, one-half of that asset would go to the SNT and the other one-half to H outright.  As to any non-probate asset in H's name only, one-half of that account would be disbursed to the SNT and the other half H would keep.

Of course, the above is assuming there was to CP agreement and I assume there wasn't one because W's Will had a SNT.  If there was a CP agreement, you are back in the disclaimer situation.

Marcus J. Fry
Lyon, Weigand & Gustafson, P.S.
Yakima, WA.






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: Wednesday, May 06, 2015 9:50 AM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] SNT and IRAs

Anyone??

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, May 4, 2015 12:42 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] SNT and IRAs

Listmates: H & W make contributions to traditional IRAs and Roth IRAs over the years.  W dies and leaves a Will with all of her assets going to a special needs trust ("SNT") for H.  There is no "Super Will" provisions in the Will for non-probate assets.  H is presumably the sole beneficiary on the non-probate assets.  H opens probate as the personal representative.  Assume that H wants to transfer as many assets as possible to the SNT.

1.       How does H, as PR, get at and transfer W's IRAs to the SNT?  Is this where a waiver would work if H is the only beneficiary listed on the savings account? What if a waiver doesn't work because there are alternative beneficiaries (adult children) on the accounts?

2.       How do Washington's community laws work here?  Shouldn't, technically, ½ of W's savings accounts go into the SNT and ½ of H's savings account go into the SNT?

All guidance appreciated.
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