[WSBAPT] life estate

Mon Dec 18 14:26:20 PST 2017

If you are trying to do Medicaid planning with a QCD retaining a life estate in the parent, there is a whole set of rules and consequences about which you should become familiar, as well.

Maybe you could share with the list what the client’s goals are in seeking the transfer. What’s driving the process with this client?

Michael A. Winslow
1204 Cleveland Ave.
Mount Vernon, WA 98273
Ph. 360-336-3321
Em. Mike at winslegal.com

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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Heather deVrieze
Sent: Monday, December 18, 2017 12:55 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] life estate

Rachel,

I think there are several differences between a Transfer on Death Deed (TODD) vs. Quit Claim Deed Retaining a Life Estate.

First – a TODD is not a current gift requiring valuation and a gift tax return to report the gift. 
Second – a TODD conveys no current interest now, possessory or otherwise, and can be revoked by the donor at any time while they are alive. The property can be sold with the owner/donor keeping all the proceeds. A remainder interest holder would be required to participate in a sale during owner/donor’s life.
Third – excise tax. If the property has debt, there may be excise tax due, and an excise tax affidavit will be required in any case. 
Finally – basis. There is some confusion among tax professionals over whether a property interest received during life, but only fully possessory at death is entitled to a full step up in basis. 

I can’t see a reason to use a life estate where a TODD is available to transfer property to a daughter at death.

Heather

Heather S. de Vrieze
Attorney-at-Law
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3909 California Avenue SW
Seattle, WA 98116-3705                          
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From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Rachel Edmiston
Sent: Monday, December 18, 2017 11:50 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] life estate

>From what I've been able to find, a life estate will do the same thing.  Is that wrong?  

On Sun, Dec 17, 2017 at 3:01 PM, Bryce Dille <BryceD at cdb-law.com> wrote:
Why aren’t you using transfer on death deed so you preserve step up in basis on death of mother
Sent from my iPhone

On Dec 17, 2017, at 1:48 PM, Rachel Edmiston <rachel.edmiston at gmail.com> wrote:
Hi,
One of my clients wants to give her house to her daughter and retain a life estate for herself.  I thought this was done by filing a quit claim deed that retained a life estate, but I’m having a hard time finding a sample. Do any of you have one I could use as a guide?  I’d also appreciate any helpful tips you might have or warnings about pitfalls as I’ve obviously never done this before.
Thank you,
Rachel Edmiston

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-- 
Rachel Edmiston, 
PO Box 13738
Mill Creek, WA  98082
T: 425-945-6333
F: 425-272-4294

CONFIDENTIAL: ATTORNEY/CLIENT PRIVILEGED; ATTORNEY WORK PRODUCT The information contained in this email is intended for the individual or entity above. This email is protected by the Electronic Communications Privacy Act, 18 U.S.C. Sections 2510-2521 and is legally protected by the attorney/client privilege and/or work product doctrine. If you are not the intended recipient, please do not read, copy, use, forward or disclose this communication to others; also, please notify the sender by replying to this message, and then delete this message from your system. Thank you.
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