[WSBAPT] Creating trust for disclaimed property

Fri Oct 26 17:31:23 PDT 2018

Hi Randy,

First, are you certain the default in the Qualfied plan is the estate and not contractually another way.  Many times the default is a chain of family (surviving spouse, if any, if non surviving child(ren) etc).  So, if you haven't looked at the plan specifics that is where you will want to start.

If the default for the plan is the estate, the only option she has, if she insists it go into trust, is to accept.  She may want to accept in her name, accelerated the distribution on the amount, and give a gift net of taxes.  Or perhaps, she wants to take a wait and see approach, accept it as an inherited IRA, take RMD over her lifetime and each year make a gift as she seems fit.

Finally, although I am not sure a Plan Administrator or the IRA for that matter would follow the directive of a TEDRA setting up a trust for son, you might consider that avenue but son would have to sign off and agree to trust.  This would require disclosure of risk that the IRS, upon audit, has no obligation to be bound by the TEDRA.

All the best,

Diane J. Kiepe

Diane J. Kiepe, Attorney at Law
Douglas * Eden
717 W. Sprague Ave., Suite 1500
Spokane, WA  99201
Phone:  (509) 455-5300
Fax:        (509) 455-5348
djkiepe at depdslaw.com

From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of Randolph Petgrave
Sent: Friday, October 26, 2018 5:15 PM
To: WSBA Probate & Trust Listserv
Subject: [WSBAPT] Creating trust for disclaimed property

Hi Folks,

I have a client who is the PR of an intestate probate.  She has no beneficial interest in the estate since she is the decedent's sister and the decedent was only survived by a 24 year old son.  Client is however, the only designated beneficiary of the decedent's retirement pension and other deferred compensation accounts.

Client wants the money to go to her nephew, but in trust (he's already inheriting a significant amount outright).  For personal tax reasons, she does not want it to accept it or have it pass through her.  My reading of RCW 11.86 is that if she disclaims, it will default to the estate, but she cannot restrict or control its disposition.

What are my options on making this happen?

Regards,
Randy

Petgrave & Petgrave, PLLC
Attorneys at Law
1001 4th Avenue Suite 3200
Seattle, WA 98194

Direct:  (206) 240-9148
Fax:       (206) 260-2710

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