[WSBAPT] RLT question (David King)
Mike Winslow
mike at winslegal.com
Tue Sep 25 16:15:46 PDT 2018
Agree with John. If the corporation shares or the LLC units are owned by H and W in their own names, then at death the transfer of these assets would need to be accomplished by probate, which is likely to be way more expensive than making a transfer of the shares and units to ownership by them "as trustees". If these assets are transferred to ownership under the trust by your clients, make sure the transfer on the certificates or assignment of units reads similar to the following:
"John Smith and Elsie Smith, Trustees of the Smith Revocable Living Trust U/A dated June 29, 2011."
An "assignment of units without certificate" is the most likely approach to transfer of the LLC units (assuming there are no paper certificates for the issued units).
The corporation ownership change is a simple stock transfer procedure.
The Trustees need to take title as "trustees" for the transfer to be effective and valid.
By changing the ownership to the trustees of the trust, you have "funded" the trust with assets which are now controlled by the trustees under the terms of the trust. When the trustees die, the successor trustees take over without need of a probate and are able to distribute assets without the need for letters testamentary issued in a probate.
Michael A. Winslow
1204 Cleveland Ave.
Mount Vernon, WA 98273
Ph. 360-336-3321
Em. Mike at winslegal.com
This message is from an attorney, so it’s confidential. If you are not the intended recipient, it’s too late to stop reading this message, but you may not use it for any improper purpose. Huge Disclaimer available upon request.
-----Original Message-----
From: wsbapt-bounces at lists.wsbarppt.com [mailto:wsbapt-bounces at lists.wsbarppt.com] On Behalf Of John J. Sullivan
Sent: Tuesday, September 25, 2018 2:16 PM
To: WSBA Probate & Trust Listserv
Subject: Re: [WSBAPT] RLT question (David King)
The RLT shouldn’t own the real property, but it should own the Member Units and shares in the entities.
You’ve got the RLT infrastructure. It’s more cost effective to properly fund it than to dismantle it and replace it with a will only design.
John Sullivan
Sent from my iPhone
> On Sep 25, 2018, at 12:21 PM, Kim Hammit <kim at gsjoneslaw.com> wrote:
>
>
> Thank you Marvin and David, - David, to answer your question as to who holds
> interest in the LLC and Inc., it is both the husband and wife. I read your
> message to mean that it makes sense to do away with the RLT and just do a
> new will dividing property as they wish?
>
> Or are you saying they would have to own the LLC/Inc. interests as "Trustees
> of the ABC Trust" rather than individually as they do now? That seems like
> more unnecessary work and I'm not understanding what benefit they would gain
> from that.
>
> I certainly don't want to imply the prior attorney did anything wrong here
> but I cannot wrap my head around the way it was done and the clients are
> clueless - they just know they don't understand it.
>
> Kim
>
> Message: 10
> Date: Tue, 25 Sep 2018 10:35:52 -0700
> From: Marvin Benson <marvinbensonlaw at gmail.com>
> To: "WSBA Probate & Trust Listserv" <wsbapt at lists.wsbarppt.com>
> Subject: Re: [WSBAPT] RLT question
> Message-ID:
> <CACodssrjGhMSRkDSFVHAUA5RyEM_ZmpDdSok6A24iLYrsY9DYw at mail.gmail.com>
> Content-Type: text/plain; charset="utf-8"
>
> I also do not see that the RLT is doing them any good with properties
> outside the trust. Since they are not interested in probate avoidance, it
> might be better to redo the will so it is not a pour over will.
>
> Marvin Benson
>
>> On Tue, Sep 25, 2018 at 10:22 AM Kim Hammit <kim at gsjoneslaw.com> wrote:
>>
>> I was presented with an estate package that clients want to revise.
>> There is a RLT, pour over will, reciprocal POA, separate general
>> durable POA (not sure why separate), HC Directives. They have several
>> properties ? some are in LLC, some in INC, some individually and one
>> is joint with child (they want this to stay out of estate and just go
>> to daughter since they are just cosigners on the loan. The trust
>> schedule shows all properties under each business but they were not
>> deeded to the trust, in fact none of the properties were ever deeded
>> to the trust. Wouldn?t that require a probate of the pour over will to
> get those properties into the trust at death?
>> What is the point of a trust in this scenario? I don?t want to run up
>> a big bill for the clients redoing everything but I don?t see a real
>> need or benefit of the RLT if the properties are in the individual
>> businesses, not the trust. Total NET value of estate is around $1.7M
>> and there are no out of state properties. Neither client particularly
>> cares to avoid probate nor are they terribly concerned about
>> post-death disputes. Since none of the properties were transferred to
>> the trust, is there any potential harm in simply doing away with the
>> trust and providing for potential tax concerns in testamentary trusts?
>>
>>
>>
>>
>>
>> Kimberly S. Hammit
>>
>> Associate Attorney
>>
>>
>>
>> GSJONES LAW GROUP, P.S.
>>
>> 1155 Bethel Avenue
>>
>> Port Orchard, WA 98366
>>
>> Tel: (360) 876-9221
>>
>> Fax: (360) 876-5097
>>
>>
>>
>>
>>
>> GSJONES LAW GROUP, P.S. - The information in this email message may be
>> privileged, confidential, or otherwise protected from disclosure. Any
>> review, dissemination or use of this transmission or its contents by
>> persons other than the addressee(s) is strictly prohibited and this
>> transmission does not constitute a waiver. If you have received this
>> transmission in error, please delete this email and respond to sender
>> via kim at gsjoneslaw.com or call our office at (360) 876-9221.
>>
>>
>> _______________________________________________
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> Message: 11
> Date: Tue, 25 Sep 2018 10:52:43 -0700
> From: David King <david at soundadvocates.com>
> To: "WSBA Probate & Trust Listserv" <wsbapt at lists.wsbarppt.com>
> Subject: Re: [WSBAPT] RLT question
> Message-ID:
> <CANs35_=rdD_2yKH1sPm+gkiaz+28RiDEoujBzBFAnkVT98yjNA at mail.gmail.com>
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>
> Who are the members or shareholders of the entities holding the properties?
> That seems to me to be the most pertinent question re: trust funding and RLT
> usefulness here. If Trustee / Trust holds the business interests, this can
> work. Trustee would not be the outright owner of the properties if they are
> held by business entities but can control the properties through the
> business ownership.
>
> On Tue, Sep 25, 2018 at 10:49 AM Marvin Benson <marvinbensonlaw at gmail.com>
> wrote:
>
>> I also do not see that the RLT is doing them any good with properties
>> outside the trust. Since they are not interested in probate
>> avoidance, it might be better to redo the will so it is not a pour over
> will.
>>
>> Marvin Benson
>>
>>> On Tue, Sep 25, 2018 at 10:22 AM Kim Hammit <kim at gsjoneslaw.com> wrote:
>>>
>>> I was presented with an estate package that clients want to revise.
>>> There is a RLT, pour over will, reciprocal POA, separate general
>>> durable POA (not sure why separate), HC Directives. They have several
> properties ?
>>> some are in LLC, some in INC, some individually and one is joint with
>>> child (they want this to stay out of estate and just go to daughter
>>> since they are just cosigners on the loan. The trust schedule shows
>>> all properties under each business but they were not deeded to the
>>> trust, in fact none of the properties were ever deeded to the trust.
>>> Wouldn?t that require a probate of the pour over will to get those
>>> properties into the trust at death? What is the point of a trust in
>>> this scenario? I don?t want to run up a big bill for the clients
>>> redoing everything but I don?t see a real need or benefit of the RLT
>>> if the properties are in the individual businesses, not the trust.
>>> Total NET value of estate is around $1.7M and there are no out of
>>> state properties. Neither client particularly cares to avoid probate nor
> are they terribly concerned about post-death disputes.
>>> Since none of the properties were transferred to the trust, is there
>>> any potential harm in simply doing away with the trust and providing
>>> for potential tax concerns in testamentary trusts?
>>>
>>>
>>>
>>>
>>>
>>> Kimberly S. Hammit
>>>
>>> Associate Attorney
>>>
>>>
>>>
>>> GSJONES LAW GROUP, P.S.
>>>
>>> 1155 Bethel Avenue
>>>
>>> Port Orchard, WA 98366
>>>
>>> Tel: (360) 876-9221
>>>
>>> Fax: (360) 876-5097
>>>
>>>
>>>
>>>
>>>
>>> GSJONES LAW GROUP, P.S. - The information in this email message may
>>> be privileged, confidential, or otherwise protected from disclosure.
>>> Any review, dissemination or use of this transmission or its contents
>>> by persons other than the addressee(s) is strictly prohibited and
>>> this transmission does not constitute a waiver. If you have received
>>> this transmission in error, please delete this email and respond to
>>> sender via kim at gsjoneslaw.com or call our office at (360) 876-9221.
>>>
>>>
>>> _______________________________________________
>>> WSBAPT mailing list
>>> WSBAPT at lists.wsbarppt.com
>>> http://mailman.fsr.com/mailman/listinfo/wsbapt
>>
>> _______________________________________________
>> WSBAPT mailing list
>> WSBAPT at lists.wsbarppt.com
>> http://mailman.fsr.com/mailman/listinfo/wsbapt
>
>
>
> --
> David M. King, Attorney
>
> 707 E Harrison Street
> Seattle, WA 98102
> Phone: 206-420-8710
> Fax: 206-973-3034
>
>
> This electronic message contains information from the law firm of Sound
> Advocates Law Group PLLC. The contents may be privileged and confidential
> and are intended for the use of the intended addressee(s) only. If you are
> not an intended addressee, note that any disclosure, copying, distribution,
> or use of the contents of this message is prohibited. If you have received
> this e-mail in error, please contact me at david at soundadvocates.com.
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