[WSBAPT] Question about RCW 88.33 and transfer of real property into Revocable Living Trust

[David Moe]

I had such a client in King County in 2015.  Near the end of his life, it came to his (and his family’s) attention that King County Assessor’s Current Use department interpreted RCW 83.34.108(6)(k) to deprive the heirs of beneficial owners (RLT Trustor/Beneficiary types) of the two-year time window exemption provided for sale or transfer of land with removal of the current use classification without imposition/recoupment of the previous seven years of tax reduction (plus interest and penalty).  The County’s rationale was/is that, if the property was held by a trust (a living trust does not “die”), no two-year exemption window opens for the trust beneficiaries upon the death of the trustor.
To verify the County’s position, I met with the (then) King County Assessor’s current use officer, and she confirmed this. She may actually have been the source of the advice.  In the nick of time, the trustor deeded the current-use forest land back to his individual name, then passed away a few weeks later.
While I can’t take credit for avoiding the “trap,”  neither do I share blame for assisting with the prior estate planning use of the RLT.  Some other advisor did that work.

BTW—I can think of at least two other estate planning or elder law situations where having chosen a revocable living trust might preclude a substantial benefit—the testamentary division exemption under the subdivision statute, and the “testamentary spousal special needs trust”.  Can anyone think of other examples?




From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Sarah Dion
Sent: Wednesday, April 03, 2019 5:02 PM
To: wsbapt at lists.wsbarppt.com
Subject: [WSBAPT] Question about RCW 88.33 and transfer of real property into Revocable Living Trust

Hi all-

I have a client who owns real property in Chelan County that has been designated "forest land" under RCW 88.33.130. He would like to transfer ownership of this property to an RLT (assume for good reasons). I am trying to make sure the transfer won't wreak havoc with this designation. I've been trying to figure this out, but am coming up empty. I confess I don't have many clients who own forest land!

Does anyone have insight on this or ideas? Thanks in advance!

Sarah Jael Dion

Dion Law PLLC
206-550-4005
sarah at dionlaw.com<mailto:sarah at dionlaw.com>
www.dionlaw.com<http://www.dionlaw.com/>

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