[WSBAPT] Sibling buy out

[jeffrey winter]

Thank you, Mike!


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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Mike Winslow <mike at winslegal.com>
Sent: Wednesday, November 16, 2016 5:04 PM
To: 'WSBA Probate & Trust Listserv'
Subject: Re: [WSBAPT] Sibling buy out


It sounds like you are ways down the road on this... but, your structure will mandate excise tax unless the estate has other assets to allow non-prorata distribution.

Consider instead simply putting house in trust with the three parties, with the taking child having the right to live there rent free, with condition they maintain the property, pay taxes and insurance etc.

Trust could then make disposition if the non-taking parties predecease the taking child; could also provide for equal division of proceeds in event of sale.

This would avoid the excise tax issue, while still protecting the non-taking parties.



Deed the property from the estate to the trust, thus creating the mechanism to prevent improper distribution, without creating debt, more tax ramification, gift tax issues, etc.



Michael A. Winslow

1204 Cleveland Ave.

Mount Vernon, WA 98273

Ph. 360-336-3321

Em. Mike at winslegal.com



This message is from an attorney, so it's confidential. If you are not the intended recipient, it's too late to stop reading this message, but you may not use it for any improper purpose. Huge Disclaimer available upon request.



From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of jeffrey winter
Sent: Wednesday, November 16, 2016 4:31 PM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Sibling buy out



Listmates,



I have an estate where mom died leaving 3 beneficiaries -- two children, and the surviving spouse of a third child who survived the parent, but died shortly afterward.  Surviving spouse takes the deceased child's share under a Community Property Agreement (Will had specified to the three children "share and share alike", with no provision for descendants of a deceased child taking...).



One child is residing in mom's home, and wishes to stay there (the "taking child") -- the other child and the surviving spouse of the decease child, would like the taking child to be able to live at mom's house, but wish to be protected in the event it is sold.  The plan presently is for mom's estate to convey the house to the taking child, subject to a note and second deed of trust in favor of the sibling and surviving spouse.  The sibling and surviving spouse intend to forgive the payments due under the note, but -- in the event the house is sold-- would have their interests protected.



There will be a TEDRA outlining this arrangement -- the question is:  do we refer to the intent to forgive payments under the note in the TEDRA?  I would think that to be fair to the taking child, we would...but I'm concerned about what effect this might have with respect to excise and/or income taxes.



Jeff Winter



Law Office of Jeffrey D. Winter, P.S.

604 North Main Street

Ellensburg, WA 98926

(509) 925-9600
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