[WSBAPT] Stepped-up basis for Credit Shelter Trust with General Power of Appt.

[Ronda Larson]

Listmates,

I am seeking feedback from seasoned tax savvy estate planners. Clients are a blended family but do not have a taxable estate. I would like the clients to get a step up in basis on property that will be put in a testamentary credit shelter trust. My plan is to add language giving a formula testamentary general power of appointment with ordering rules and non-adverse party consent. Thus, the surviving spouse can appoint to his or her estate's creditors (and, I plan to also include power to appoint to the trustor's then-living descendants, unless the client says otherwise), but the power is limited to assets with the greatest appreciation (and excludes IRA/Retirement plans), and to exercise the power, the spouse must have consent of a non-adverse party.

In cases where there is a potentially taxable estate, I plan to add a capping rule, thus limiting the power to appoint to the fraction or percentage that doesn't trigger estate taxes.

Is there anything about Washington state law that I am not accounting for in this scheme? Any other thoughts you have regarding this issue? I just want to cover my bases by putting it out here for input.

Thanks.

Ronda Larson
Larson Law, PLLC
1700 Cooper Point Rd SW, Bldg A3
Olympia WA 98502
Ph: 360-259-3076
ronda at larsonlawpllc.com<mailto:ronda at larsonlawpllc.com>
www.larsonlawpllc.com<http://www.larsonlawpllc.com/>

NOTICES: This message, including attachments, is confidential and may contain information protected by the attorney-client privilege or work product doctrine. If you are not the addressee, any disclosure, copying, distribution, or use of the contents of this message are prohibited. If you have received this email in error, please destroy it and notify me immediately. Any tax advice contained in this message is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the internal revenue code or (2) promoting, marketing, or recommending to others any tax-related matter(s) addressed here.

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20171229/3579b9d2/attachment.html>