[WSBAPT] TEDRA agreement & exchange of property in payment of debt to PR

[Marcus Fry]

Dalynne:
You have a taxable event for excise tax purposes, distributing the house to creditor in exchange for extinguishment of debt to the estate.  From the facts, it appears the decedent died with 2 children and a surviving parent.  If the 2 children disclaim, would the surviving parent inherit?  If so, disclaimer would be a way you could pass the house via inheritance without excise tax.  Of course, this assumes no other assets or other creditors in the Estate.

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

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Dalynne Singleton
Sent: Monday, December 12, 2016 5:26 PM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] TEDRA agreement & exchange of property in payment of debt to PR

I have a non-intervention probate in which the Administrator (father of decedent) was owed $128,000 in a creditor's claim for monies owed to the father (making mortgage payments so house wouldn't go into foreclosure for many years, etc.) and the two adult children and father of the decedent have agreed that father take the home with $80,000 equity in exchange for payment in full of the claim.  I have prepared the Petition to allow the creditor's claim and ask if anyone has a sample TEDRA agreement they would share with me?

Also, would I be able to issue a PR Deed to the Administrator so no excise tax would be due or is this somehow considered a "sale" for payment of a debt?

I'd like to present the TEDRA agreement to the court at the hearing on the PR creditors claim pursuant to RCW 11.40.140.
Thanks.

Dalynne Singleton

Gourley Law Group
Snohomish Escrow
The Exchange Connection
1002 10th Street / PO Box 1091
Snohomish, WA 98291

360.568.5065
360.329.4079
360.568.8092  fax
dalynne at glgmail.com<mailto:dalynne at glgmail.com>

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