[WSBAPT] Delaware Statutory Trusts

Fri Jan 26 12:29:45 PST 2018

No real responses, I wish I had some. I did have an exchange with a 1031
guy my clients work with and he had sent one client this- though this still
does not give a legally backed up answer, but I think it is correct given
that the property is located out of WA, at the very least it would be
something that I think could be successfully challenged if the DOR tried to
include it as a WA asset.. I was thinking to give a call to the DOR as my
next step and can let you know if that gives me a definitive answer, but
maybe we can set up a time to chat before I go that route!

Following up our conversation this morning, ownership of DSTs with property
located outside Washington State would "effectively" not be included in the
Washington State estate tax calculation. The reason I say "effectively" is
because technically, the calculation for Washington estate tax *first
considers all assets* (both tangible and intangible) owned by the
individual, then *the estate tax rate is multiplied by the total estate*
 and *pro-rated by the amount of intangible assets and tangible assets held
within WA State versus the overall estate value*. (see WAC 458-57-125
<http://apps.leg.wa.gov/wac/default.aspx?cite=458-57-125>)

E.g. if you have a $10M estate that includes $6M of traded securities,
$2.5M of property located in WA and $1.5M of property located outside WA
(DSTs or fee-simple property) - your estate tax liability would be 85%
($10M total estate less $1.5M out of state property, divided by the $10M
total estate) of the liability resulting from including all $10M of assets.
The reason they choose to calculate the tax this way versus a standard
exemption approach is so that you still receive an estate tax bill if you
have assets in excess of the standard state exemption of ~$2.1M, but the
majority of the assets are located outside Washington.

On Fri, Jan 26, 2018 at 12:08 PM, John Creahan <john at cairn-law.com> wrote:

> Hi Julie,
>
> Did you get any responses to this?
>
> I have a client with several DSTs, and have very little success finding
> information – although I have been researching other issues.
>
> I’d be happy to chat if you like but am not sure how helpful I can be.
>
> Thanks,
>
> John
>
>
>
> John Creahan
>
> www.cairn-law.com
>
> *Now located in the heart of Fremont *3417 Evanston Ave. N, Suite 312
> Seattle, WA 98103
> 206-578-5877 <(206)%20578-5877>
>
>
>
>
>
> *From:* wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.
> wsbarppt.com] *On Behalf Of *Julie Martiniello
> *Sent:* Tuesday, January 23, 2018 11:37 AM
> *To:* Trust and Probate Section <wsbapt at lists.wsbarppt.com>
> *Subject:* [WSBAPT] Delaware Statutory Trusts
>
>
>
> Is anyone well versed on DSTs? I have some clients doing 1031 exchanges
> and using these and my questions is: Is the DST included in their WA
> taxable estate?
>
>
>
> Essentially, the trust owns real property all over the US, sometimes in
> WA, and it is not really a liquid assets- as there are many restrictions on
> transfer etc. If the DST they invest owns property located out of WA,  then
> does that amount get apportioned?
>
>
>
> My gut says it gets apportioned, but I would love to here from someone
> with real life knowledge on this!
>
>
>
> TIA
> --
>
> Respectfully,
>
>
> JULIE A. MARTINIELLO | PARTNER | DIMENSION LAW GROUP PLLC
> 130 Andover Park East, Suite 300 | Tukwila, WA 98188
>
> t: *206.973.3500 <(206)%20973-3500> *| f: *206.577.5090
> <(206)%20577-5090>*| e: JULIE at dimensionlaw.com| www.dimensionlaw.com
>
>
>
> *PLEASE NOTE OUR NEW ADDRESS*
>
>
>
> PRIVILEGED AND CONFIDENTIAL:  This e-mail (including any attachments) is
> intended only for the use of the individual or entity named above and may
> contain privileged or confidential information. If you are not the intended
> recipient, or the employee or agent responsible to deliver it to the
> intended recipient, you are notified that any review, dissemination,
> distribution or copying of this e-mail is prohibited. If you have received
> this e-mail in error, please immediately notify us by e-mail, facsimile, or
> telephone; return the e-mail to us at the e-mail address below; and destroy
> all paper and electronic copies.
>
>
> PRIVILEGED AND CONFIDENTIAL:  This e-mail (including any attachments) is
> intended only for the use of the individual or entity named above and may
> contain privileged or confidential information. If you are not the intended
> recipient, or the employee or agent responsible to deliver it to the
> intended recipient, you are notified that any review, dissemination,
> distribution or copying of this e-mail is prohibited. Attempts to intercept
> this message are in violation of 18 USC 2511(1) of the Electronic
> Communications Privacy Act, which subjects the interceptor to fines,
> imprisonment and/or civil damages. If you have received this e-mail in
> error, please immediately notify us by e-mail, facsimile, or telephone;
> return the e-mail to us at the e-mail address below; and destroy all paper
> and electronic copies. Any settlement offer contained herein is made
> pursuant to Washington ER 408, and without admitting fault or liability on
> the part of this firm’s client(s) or its agents.  IRS CIRCULAR 230
> DISCLAIMER:  To ensure compliance with requirements imposed by the IRS, I
> inform you that any U.S. tax advice contained in this communication
> (including any attachments) is not intended or written to be used, and
> cannot be used, for the purpose of (i) avoiding penalties under the
> Internal Revenue Code; or (ii) promoting, marketing or recommending to
> another party any transaction or tax-related matter addressed herein.
>
> _______________________________________________
> WSBAPT mailing list
> WSBAPT at lists.wsbarppt.com
> http://mailman.fsr.com/mailman/listinfo/wsbapt
>

-- 
Respectfully,

JULIE A. MARTINIELLO | PARTNER | DIMENSION LAW GROUP PLLC
130 Andover Park East, Suite 300 | Tukwila, WA 98188
t: *206.973.3500 *| f: *206.577.5090*| e: JULIE*@dimensionlaw.com*|
www.dimensionlaw.com

*PLEASE NOTE OUR NEW ADDRESS*

PRIVILEGED AND CONFIDENTIAL:  This e-mail (including any attachments) is
intended only for the use of the individual or entity named above and may
contain privileged or confidential information. If you are not the intended
recipient, or the employee or agent responsible to deliver it to the
intended recipient, you are notified that any review, dissemination,
distribution or copying of this e-mail is prohibited. If you have received
this e-mail in error, please immediately notify us by e-mail, facsimile, or
telephone; return the e-mail to us at the e-mail address below; and destroy
all paper and electronic copies.

-- 
PRIVILEGED AND CONFIDENTIAL:  This e-mail (including any attachments) is 
intended only for the use of the individual or entity named above and may 
contain privileged or confidential information. If you are not the intended 
recipient, or the employee or agent responsible to deliver it to the 
intended recipient, you are notified that any review, dissemination, 
distribution or copying of this e-mail is prohibited. Attempts to intercept 
this message are in violation of 18 USC 2511(1) of the Electronic 
Communications Privacy Act, which subjects the interceptor to fines, 
imprisonment and/or civil damages. If you have received this e-mail in 
error, please immediately notify us by e-mail, facsimile, or telephone; 
return the e-mail to us at the e-mail address below; and destroy all paper 
and electronic copies. Any settlement offer contained herein is made 
pursuant to Washington ER 408, and without admitting fault or liability on 
the part of this firm’s client(s) or its agents.  IRS CIRCULAR 230 
DISCLAIMER:  To ensure compliance with requirements imposed by the IRS, I 
inform you that any U.S. tax advice contained in this communication 
(including any attachments) is not intended or written to be used, and 
cannot be used, for the purpose of (i) avoiding penalties under the 
Internal Revenue Code; or (ii) promoting, marketing or recommending to 
another party any transaction or tax-related matter addressed herein. 
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbapt/attachments/20180126/8c6f8ed3/attachment.html>