[WSBAPT] The story changes..... Gift vs. Unrecorded Mortgage

[Brent Williams-Ruth]

That's just valuable information - I have never dealt with taxable gifts
before, presumed that it was the person who received it that needed to
declare.

Thanks for that!

On Fri, Apr 20, 2018 at 11:45 AM, Sara D. Longley <sara at longley-law.pro>
wrote:

> If the original $100k was a gift, the donor, not your decedent or his
> surviving spouse, would have been the one to report the gift to the IRS.
>
>
>
>
>
> [image: cid:image001.jpg at 01D1F8A6.19C81E60]
>
> Sara D. Longley, J.D., LL.M.
>
>
>
> LONGLEY LAW PLLC
>
> 1734 NW Market Street
>
> Seattle, WA 98107
>
> (206) 434-5644
>
> Sara at Longley-law.pro <Sara at longley-law.pro>
>
> www.longley-law.pro
>
>
>
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> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com] *On Behalf Of *Brent Williams-Ruth
> *Sent:* Friday, April 20, 2018 8:59 AM
> *To:* WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
> *Subject:* [WSBAPT] The story changes..... Gift vs. Unrecorded Mortgage
>
>
>
> Good Morning and Happy Friday list!
>
>
>
> My prior email is amended as my client has given me the entire backstory.
> Many twists, any guidance is appreciated. Will be hitting the books this
> afternoon to find the answers.
>
>
>
> There exists (so says my client, I have not seen it personally yet) a
> letter between client/personal representative - the surviving spouse,
> Decedent, and "Mrs. Smith" who gifted the two of them $100,000. (The only
> document allegedly in existence is that this money is a gift and not
> expected to be repaid).  Surviving Spouse is going back to look to see if
> money was reported to IRS as gift - though I find it unlikely.
>
>
>
> Apparently, Decedent was sending money, over $12,000 since then to Mrs.
> Smith. This was done without knowledge of the surviving spouse.
>
>
>
> Fast forward to January 2018. Two weeks after Decedent passed, Mrs. Smith
> tells Surviving Spouse that Decedent was paying her off, and that they had
> been meaning to sign contract/agreement saying that money was a loan and
> interest would be due with payment - but to the surviving spouses'
> knowledge, no such document was ever created or executed.
>
>
>
> Mrs. Smith is calling for repayment, plus interest. She wants all money
> now but is willing to just let Surviving Spouse pick up where Decedent left
> off - but charging interest.
>
>
>
> Questions that are running through my head (and please feel free to let me
> know if I have missed a question that I need to look up)
>
>
>
> 1) Since there is, currently, no other known document signed by all three
> (a marital community and Mrs. Smith) other than the Gift letter - do I stop
> right there and just make sure that they amend the 2016 tax return to
> declare such a gift (assuming it was not done originally)?
>
>
>
> 2) If I don't stop, and there IS a signed contract between Decedent and
> Mrs. Smith only indicating that the arrangement was a non-recorded mortgage
> with interest due - would Garn-St. Germain apply where Mrs. Smith is
> prohibited from calling the note;
>
>
>
> 3) Would such a mortgage contract even be enforceable under Washington law
> given that as a community asset, Decedent encumbered the property without
> the knowledge and consent (and signature) of Surviving Spouse who has the
> good faith belief that this was a gift?
>
>
>
> ​Thank you again for any suggestions on where to start my dive into coming
> up with a solution for my client.
>
>
>
> Brent​
>
>
>
> --
>
> *Brent Williams-Ruth*
> *Founding Member*
>
> *BWR Consulting, PLLC*
>
> Phone: (425) 830-5134
>
> e-mail <brent at bwrconsults.com> / website <http://www.bwrconsults.com> /
> facebook <http://www.facebook.com/bwrconsults>
>
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-- 

*Brent Williams-Ruth*
*Founding Member*

*BWR Consulting, PLLC*

Phone: (425) 830-5134

e-mail <brent at bwrconsults.com> / website <http://www.bwrconsults.com> /
facebook <http://www.facebook.com/bwrconsults>
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