[WSBAPT] question on right of retainer

Mon Sep 11 15:57:18 PDT 2017

I agree with Heather to not utilize any language that says "forgive
loan"... with that in mind, I would change the language from "loan" to
"advancement".  IE: "During my lifetime I advanced funds to my children
that I desire to be calculated in the division of my estate.  I have
attached a list of advancements to each of my children and direct my PR to
consider them a part of my estate value when dividing my residual estate."
.... or something of the like.

Paul H. Grant - JD, LL.M

Planning with Purpose, Inc
Lynnwood, WA 98036
425-939-9948
www.planningwithpurposeinc.com

Estate Planning. Business Planning. Wealth Succession.

On Mon, Sep 11, 2017 at 3:22 PM, Heather deVrieze <
heatherd at westseattlelaw.com> wrote:

> Similarly, I often include language to indicate that any unpaid balance of
> such loan(s) be treated as a portion of the owing child’s distributive
> share of the estate. I have spent countless hours explaining this math to
> clients, and neither the debtors nor the other beneficiaries ever seem very
> happy about it. I also avoid using any language about “forgiving the debt”
> so as to avoid any tax on discharge of indebtedness.
>
>
>
> Here is some language I might have included for a hypothetical client
> recently:
>
>
>
> “A portion of my estate is comprised of certain loans I have made to my
> children over the years. As of the date of this Will, Child One owes me
> $47,000.00, Child Two owes me $110,000.00, and Child Three owes me
> $13,000.00. I maintain a record of repayment of each loan with the
> promissory notes documenting these loans. I direct my Personal
> Representative to allocate the outstanding principal balance of such loans
> against each child’s share of my estate, provided, in no case shall a child
> be required to repay any portion of such outstanding loan balance at my
> death if the outstanding loan balance exceeds their distributive share of
> my estate.”
>
>
>
> Heather
>
>
>
>
>
> Heather S. de Vrieze
> *Attorney-at-Law*
>
> *[image: cid:image001.jpg at 01D013C2.30F35160]*
>
> 3909 California Avenue SW
>
> Seattle, WA 98116-3705
>
> (206)938-5500 <(206)%20938-5500>
>
> heatherd at westseattlelaw.com
>
> www.westseattlelaw.com
>
> *Click here to connect with de Vrieze | Carney on Facebook: *  *[image:
> FB Logo]* <https://www.facebook.com/DeVriezeCarney>
>
>
>
> CONFIDENTIAL & PRIVILEGED. This e-mail message may contain legally
> privileged and/or confidential information.  If you have received this
> e-mail in error, please notify the sender immediately and delete all copies
> of this e-mail message and any attachment.
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com] *On Behalf Of *Douglas Bratt
> *Sent:* Monday, September 11, 2017 2:53 PM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
>
> *Subject:* Re: [WSBAPT] question on right of retainer
>
>
>
> Hello:
>
>
>
> Perhaps I am not understanding Rebecca’s use of the phrase “NAME1’s share
> of my estate shall be offset by any remaining unpaid loan balance.”
>
>
>
> From my perspective, there needs to be a two-point consideration of the
> unpaid loan amount.
>
>
>
> Say the Decedent wants an equal split of her Estate between her two kids.
> One of the kids owes the decedent $10,000.00.  Assume the other property in
> the estate is worth $110,000.00 (all cash).  (We won’t worry about costs of
> administration in this comment.)
>
>
>
> It seems to me that the total estate is worth $120,000.00.  Each kid is to
> get $60,000.00. The non-debtor receives $60,000.00 in cash.  The debtor kid
> gets  the $10,000.00 debt excused and an additional $50,000.00 in cash.
>
>
>
> So, I would add language that would direct that the amount of debt be
> considered one of the assets of the Estate when computing the total value
> of the Estate, with the debtor’s share to then include the excusing of the
> debt as part of the debtor’s share of the distribution of assets from the
> Estate.
>
>
>
> Is that an offset??
>
>
>
> Regards,
>
>
>
> Doug Bratt
>
>
>
>
>
> Douglas J. Bratt
>
> Lawyer
>
>
>
> [image: Envelope scaled Terry]
>
>
>
> Office: (360) 213-2040
>
>  Fax: (360) 213-2030
>
>
>
> CONFIDENTIALITY NOTICE:  This email message may contain confidential or
> privileged information.  If you have received this message by mistake,
> please do not review, disclose, copy, or distribute the email. Instead,
> please notify us immediately by replying to this message or telephoning
> us.  Thank you.
>
>
>
> NOTE:  I do not use encrypted email.  Messages sent to or from my office
> via email are not secure and may not be protected by attorney-client
> privilege.  This email address is not monitored at all times.  If your
> matter is urgent, please phone my office during regular business hours.
>
>
>
>
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>] *On Behalf Of *Rebecca
> King
> *Sent:* Monday, September 11, 2017 1:18 PM
> *To:* WSBA Probate & Trust Listserv
> *Subject:* Re: [WSBAPT] question on right of retainer
>
>
>
> Sharon, this is the language we often use in such situations:
>
> NAME1 is currently indebted to me in the principal sum of $_____ resulting
> from loans made by me. This loan amount is non-interest bearing.  I direct
> that no action to collect such debt be taken at my death. However, NAME1’s
> share of my estate shall be offset by any remaining unpaid loan balance.
> The burden of proof shall be on NAME1 to substantiate that the loan has
> been partially or fully repaid.
>
>
>
> Some of the language may not be applicable to your situation, but I hope
> it will serve as a starting point.
>
>
>
> Regards,
>
> Rebecca King
>
> Attorney
>
>
>
> *PLEASE NOTE: Our new address is 2150 N. 107th Street, Suite 501, Seattle,
> WA 98133*
>
>
>
> *Northwest Elder Law Group*
>
> 2150 N. 107th Street, Suite 501
>
> Seattle, WA 98133
>
> Main: (206) 937-6102
>
> Direct: (206) 866-6544
>
> Fax: (206) 830-9326
>
>
>
> *Providing Services in Elder Law*
>
>
>
> CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, is
> for the sole use of the intended recipient(s) and may contain confidential
> and privileged information protected by law. Any unauthorized review, use,
> disclosure or distribution is prohibited. If you are not the intended
> recipient, please contact the sender by reply e-mail and destroy all copies
> of the original message.
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>] *On Behalf Of *Sharon
> Rutberg
> *Sent:* Monday, September 11, 2017 1:01 PM
> *To:* wsbapt at lists.wsbarppt.com
> *Subject:* [WSBAPT] question on right of retainer
>
>
>
> Happy Monday, list mates --
>
>
>
> I am writing wills for clients who are concerned that if their estate were
> divided among their three children at the death of the second spouse to
> die, one child might have an outstanding debt to the parents that should be
> offset from her distributive share. As I read the law of Washington, the
> doctrine of retainer says that the debt should indeed be set off or
> "retained" before the shares are distributed.  Does anyone include language
> in their wills to account for this circumstance - that is, to refer to the
> loan and express the intent of the testator that the offset should occur?
>
>
>
> Thanks,
>
> Sharon
>
>
>
> Sharon C. Rutberg, Attorney at Law
>
> Salmon Bay Law Group, PLLC
>
> 1734 NW Market St.
>
> Seattle, WA 98107
>
> 206-735-3177, ext. 2 <(206)%20735-3177>
>
> sharon at salmonbaylaw.com
>
> Website: www.salmonbaylaw.com
>
> Washington State Bar #47055
>
> NOTICES
> The contents of this message and any attachments may be protected by the
> attorney-client privilege, work product doctrine, and/or other applicable
> protections. If you are not the intended recipient or have received this
> message in error, please notify the sender and promptly delete the message.
> Thank you for your assistance.
>
>
>
> IRS Circular 230 Disclaimer: To ensure compliance with requirements
> imposed by the IRS, we inform you that to the extent this communication
> contains advice relating to a Federal tax issue, it is not intended or
> written to be used, and it may not be used, for (i) the purpose of avoiding
> any penalties that may be imposed on you or any other person or entity
> under the Internal Revenue Code or (ii) promoting or marketing to another
> party any transaction or matter addressed herein.
>
>
>
>
>
>
>
> _______________________________________________
> WSBAPT mailing list
> WSBAPT at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbapt
>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20170911/ff968a78/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image006.jpg
Type: image/jpeg
Size: 6775 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20170911/ff968a78/image006.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 7141 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20170911/ff968a78/image001.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.png
Type: image/png
Size: 5137 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20170911/ff968a78/image002.png>