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

[Sarah Dion]

David- Just FYI I confirmed your understanding with DOR yesterday. If the
designated forest land is in a trust or an LLC, an heir cannot take
advantage of the two-year window to avoid payment of compensating tax if
they decide to sell to a party that isn't interested in continuing with the
use as designated forest land. Not that I didn't believe you! Thanks so
much for sharing your experience. And thanks again to eveyone who weighed
in.

Sarah Jael Dion

Dion Law PLLC
206-550-4005
sarah at dionlaw.com
www.dionlaw.com

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On Wed, Apr 3, 2019 at 6:11 PM David Moe <davidmoe at maplevalleylaw.com>
wrote:

> 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
> www.dionlaw.com
>
> This message is private or privileged. If you are not the person for whom
> this message is intended, please notify me immediately and delete the
> message. Please do not copy or send this message to anyone else.
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