[WSBAPT] Estate Planning for Single Person (Might Involve EstateTax)

[Felicia Value, Attorney at Law]

Disclaimers,  and trusts,  don’t necessarily offer any tax reduction by themselves.  Both of those things are tools in a tool kit,  and they can work to reduce estate taxes when they are combined correctly with other tools.  An inter vivos trust,  for example,  can be an appropriate substitute for a Will in some circumstances.  But an inter vivos trust does not,  by itself,  make any difference re: estate taxes.  Neither does a disclaimer.

Once an unmarried person goes above the limit for a taxable estate,  their options for estate tax reduction are more onerous and less efficient than the credit shelter trust available to married couples.  The most efficient estate tax reducer would be that your client wants to make such large gifts to 501(c)(3) beneficiaries that his taxable transfers fall well below the estate tax amount.  Beyond that,  it gets pretty complex,  expensive and unwieldy.  If your client doesn’t like inter vivos trusts,  he probably won’t like ILITs and FLPs.  Respectfully,  you might want to pass him to a higher level practitioner.  I do it all the time.   

Good luck!

Felicia Value
Attorney at Law
PO Box 578/116 North Third Street
La Conner, WA 98257
(360) 466-2088
www.skagitprobate.com

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From: John Yip 
Sent: Saturday, July 29, 2017 12:55 PM
To: WSBARP at lists.wsbarppt.com ; wsbapt at lists.wsbarppt.com 
Subject: [WSBAPT] Estate Planning for Single Person (Might Involve EstateTax)

Hello,


Here is the hypothetical situation: Single person wants estate planning, and his estate may be slightly over the Washington State estate tax threshold.  He wants to leave his estate to multiple beneficiaries.  However, he does not want an inter vivos trust.


In that case, would a Will with disclaimer trust provisions make sense?  Disclaimer trusts rely upon the Marital Deduction and the QTIP exceptions, which are unavailable to single persons, correct?  Also, wouldn't it be messy to set up a disclaimer trust when there are multiple beneficiaries, as some might not be willing to disclaim?


If a Will with disclaimer trust provisions would not make sense for the above hypothetical, what are some alternatives I could use for the single person's estate planning other than to set up an inter vivos trust?


Thanks,

John



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