[WSBAPT] joint tenancy property agreements

[Derek Jensen]

Sharon,

Their recent marriage creates the opportunity for a double step-up by treating it as community property. Conceptually this could be accomplished by amending the property agreement to say that effective on the first death the residence is community property and that the community property is transferred to the surviving spouse. In practice you would probably to address other community property and estate planning objectives within the revised document.

Another advantage of their marriage that may actually be more valuable than the double step-up is the ability for qualified retirement plans to be rolled over to the surviving spouse. Of course directing the retirement funds to the surviving spouse could thwart the ability of the first spouse to die to define their remainder beneficiaries. This problem would be amplified if the house was also transferring to the spouse outright instead of in a QTIP or by-pass trust. Which brings us to the Washington State Estate Tax and the comparative rates with the Federal Capital Gains Tax (20% max vs 23.9% max).



Sincerely,

Derek W. Jensen, JD, LLM
Managing Attorney


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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Sharon Rutberg
Sent: Monday, August 22, 2016 4:22 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] joint tenancy property agreements

Hello, listmates -

Does anyone out there have experience with "joint tenancy property agreements"? My clients, a same-sex couple, executed one some years ago, after buying a home together but before marrying or forming a registered domestic partnership. The agreement recites that they hold their home as JTROS and spells out the amount of equity each would receive if they split up and sold the property.

They married recently, and are updating their estate plan. I'd like to advise them of the pros and cons of keeping the JTROS and JT agreement vs. converting their home to community property. There could be a benefit as to getting a full step-up in basis at the first death, but I want to understand any other ramifications.

Thanks,
Sharon

Law Office of Sharon C. Rutberg, PS
1734 NW Market St.
Seattle, WA 98107
Website: www.sharonrutberglaw.com<http://www.sharonrutberglaw.com/>
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