[WSBAPT] Staying out of Probate w Prop Transfer After Death

[John Creahan]

Hi Paul,
I recommend opening the probate and following the will (although I think you can skip the initial transfer to the RLT) because titling the property in the surviving spouse’s name – even for a minute – might cause nasty unintended consequences.
For instance, the IRS would likely see the survivor’s transfer to the Family Trust as a taxable gift from him (rather than from the decedent), which would require filing a Form 709. Putting the property in his name might also impact the trust’s status with regard to asset protection, Medicaid eligibility, etc.
(You might want to take this answer with a grain of salt. I don’t understand why lawyers have such an aversion to probate – to me, the advantages of utilizing a legal forum with clear rules far outweigh the disadvantages.)
Hope this helps,
John


John Creahan
206-621-5848
www.cairn-law.com<http://www.cairn-law.com/>


From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Paul Grant
Sent: Monday, August 15, 2016 4:36 PM
To: Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Staying out of Probate w Prop Transfer After Death

I thought I knew the steps to follow for my client but now that it is time to put pen to paper I am second-guessing myself and wanted to reach out for other thoughts... the joy of a single-member firm!

Client owns house and three contiguous parcels in name of himself and spouse as married.  No question that the property is CP.

Client's spouse dies.  They had a trust but never funded the house or the 3 other properties.  Pour over will says to trust, then to start Family Trust with deceased spouse's property.  All very typical disclaimer A/B trust.

We need to start the Family Trust as Client has a taxable estate in WA if we do not.

I am considering an affidavit of no probate based upon the new rules to put the prop in Client's name, then have him place prop into Family Trust - but that does not follow the proper procedure and I am concerned that I will be hit with an excise tax at time of placing it into the Family Trust.

We really would love to not open a probate just to lift the properties into the trust where we can obviously move them to the Family Trust, but is there another way?

I was thinking to create the affidavit to state the prop moves to the trust, also an excise tax free move, then to Family, but???

Any thoughts or wisdom from someone who has jumped this hurdle before would be very appreciated.

Thanks,

Paul H. Grant - JD, LL.M

Planning with Purpose, Inc
Lynnwood, WA 98036
425-939-9948
www.planningwithpurposeinc.com<http://www.planningwithpurposeinc.com>

Estate Planning. Business Planning. Wealth Succession.
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