[WSBAPT] Charitable Remainder Trust v. Living Trust

[Derek Jensen]

Hi Maureen,

I'll the marital question for someone else, but take a stab at the CRT vs LT question.

Your client might benefit from using both. Tax law changes are coming, so planning should remain flexible and planners should look for opportunities. A unfunded or partially funded CRT could provide some immediate income tax benefit and a stream of income.

The living trust could hold all of her other assets and avoid probate on these assets. This would be beneficial since it sounds like your client would not want her husband to administer this property. Under probate law the surviving spouse would have the right to administer the community property.

Your client could transfer appreciated securities from the LT to the CRT prior to sale. Timing could be at her discretion and she could be the trustee.

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 Maureen Ray
Sent: Monday, December 26, 2016 11:40 AM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Charitable Remainder Trust v. Living Trust

Hello colleagues!  This is my first time coming to the font, and I appreciate any direction you might give.  I have a client who wants to make a testamentary gift to charity of her half of community real estate and cash and securities.  The size of her estate is just over the WA estate tax exemption equivalent (and roughly half of the federal equivalent).  As regards the real estate, there is a question whether her husband would sign over his half-ownership.  Should I first work on getting a Marital Agreement signed so that her half ownership of the real estate is established?  After that, would a charitable remainder trust be better than a grantor trust because of the tax benefits inherent in the CRT?  Any suggestions for a good bank to act as trustee, and possible executor, would also be appreciated.

Thanks so much,

Maureen E. Ray
P.O. Box 1711
Poulsbo, WA 98370
360-930-0637
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