[WSBAPT] Modifying Beneficiaries of an Irrevocable Trust

[David Faber]

Hi John,

W has some health problems and stepmother was a big younger than W's
father. There is a very real chance that W could die before stepmother.

Best,
David J. Faber
Faber Feinson PLLC
210 Polk Street, Suite 1
Port Townsend, WA 98368
(360) 379-4110

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On Wed, Aug 30, 2017 at 12:04 PM, John Creahan <john at cairn-law.com> wrote:

> Is W likely to outlive stepmom, given their ages and what you know about
> their health?
>
>
>
> John Creahan
>
> www.cairn-law.com
>
> *Now located in the heart of Fremont *3417 Evanston Ave. N, Suite 312
> Seattle, WA 98103
> 206-578-5877 <(206)%20578-5877>
>
>
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com] *On Behalf Of *David Faber
> *Sent:* Wednesday, August 30, 2017 11:47 AM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* Re: [WSBAPT] Modifying Beneficiaries of an Irrevocable Trust
>
>
>
> Doug,
>
>
>
> Thank you for getting back to me. The gift route would be the simplest,
> but I am trying to avoid gift tax implications if at all possible. The
> Trust has no power of appointment and provides the following:
>
>
>
> (1) upon death of the surviving grantor, the four children each share
> equally in the remaining trust estate; (2) if one of the four children
> predecease the surviving grantor, the predeceased child's share is
> distributed to their issue; (3) if no issue, then the predeceased child's
> share is distributed to the other three children or their surviving issue.
>
>
>
> Provided one of W or C is still living, then they would take under either
> (1) or (2) above, so I'm trying to figure out whether them being the only
> contingent beneficiaries of W's trust share, at least up to that point,
> would allow them to vary the terms of the trust to pass to H without
> triggering the gift tax implications. Additionally, W, in particular, wants
> to ensure that H receives the future interest in the trust now rather than
> relying upon C to make the gift at some future date. C is currently willing
> and happy to make the transfer, but upon W's death, C might have a change
> of heart. We're trying to account for all of these eventualities before
> they occur. An agreement to give a gift in the future wouldn't stand up,
> but I guess I'm wondering if some written evidence of a gift of a future
> interest in an irrevocable trust would so stand up.
>
>
> Best,
>
> David J. Faber
>
> Faber Feinson PLLC
>
> 210 Polk Street, Suite 1
>
> Port Townsend, WA 98368
> (360) 379-4110
>
>
>
> *** NOTICE: ATTORNEY CLIENT COMMUNICATION - PRIVILEGED & CONFIDENTIAL.
> This communication may contain privileged or other confidential
> information. If you are not the intended recipient, or believe that
> you have received this communication in error, please do not print,
> copy, retransmit, disseminate, or otherwise use the information. Also,
> please indicate to the sender that you have received this communication in
> error, and destroy the copy you received.***
>
>
>
> On Tue, Aug 29, 2017 at 10:22 AM, Doug Owens <
> dougowens at seattlerelawyer.com> wrote:
>
> Dear David, this is an interesting question.  It is hard to answer your
> specific question without looking at the trust language.  It may not be
> binding on anyone but W and C could agree that upon the death first of W
> and then of stepmother, C could simply gift the share coming to C to H.
> There could be gift tax implications for C but unless the share is very
> large there would not likely be any actual gift tax to pay at the time.
> Yours truly, Doug Owens
>
> On Aug 29, 2017, at 9:55 AM, David Faber <david at faberfeinson.com> wrote:
>
>
>
> Some clients of mine brought up a novel situation for me yesterday:
>
>
>
> (W)ife is a remainder beneficiary of a family trust along with three
> siblings. The trust became irrevocable upon her father's death. The trust
> specifies that if W predeceases her stepmother, W's share passes to W's
> issue upon stepmother's death. W has a (C)hild from a previous
> relationship. W and C both agree that (H)usband should receive W's interest
> in the trust if W predeceases stepmother. The trust grants no power of
> appointment to W and the trust cannot be modified by stepmother (plus, the
> relationship with stepmother is strained).
>
>
>
> Would having W & C, as all of the remainder beneficiaries of a particular
> tranche of the trust estate, execute a written agreement directing the
> tranche to H upon W's passing work to supplant the current pathing of
> remainder beneficiaries?
>
>
> Best,
>
> David J. Faber
>
> Faber Feinson PLLC
>
> 210 Polk Street, Suite 1
>
> Port Townsend, WA 98368
> (360) 379-4110
>
>
>
> *** NOTICE: ATTORNEY CLIENT COMMUNICATION - PRIVILEGED & CONFIDENTIAL.
> This communication may contain privileged or other confidential
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> copy, retransmit, disseminate, or otherwise use the information. Also,
> please indicate to the sender that you have received this communication in
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