[WSBAPT] Gift from Trustee/Beneficiary of RLT to Contingent Beneficiary

[John J. Sullivan, Esq.]

As long as the transfer is from a wholly revocable trust and dad is the sole
trustee, it is a gift for REET purposes. This assumes the trust agreement
authorizes direct gifts. Older ones required distribution out so the grantor
could make the gift, for Internal Revenue Code reasons that were repealed. 

 

I might consider having the father do a resolution as Grantor instructing
himself as Trustee to make the gift.

 

John J. Sullivan

 

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>
On Behalf Of Matt Yates
Sent: Monday, August 17, 2020 3:56 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Gift from Trustee/Beneficiary of RLT to Contingent
Beneficiary

 

Client is a CA resident whose Revocable Living Trust holds a rental property
in SW WA that he has rented out to his son for some time.  Client wanted to
gift rental house to his son but son has decided to move to NV.  Client now
wants to gift house to son and have son sell so that son gets proceeds.  If
we presume that Trustee has gifting powers (in this case, Client/father is
trustee and beneficiary) and client in capacity as trustee gifts directly
from Trust to son, is the transaction exempt from REET pursuant to WAC
458-61A-201?  For now, I am not concerned about encumbrances and assumption
thereof and paying the REET on the "consideration."  I simply want to know
if this is considered a gift for purposes of applying the exemption.  I hate
it when the WAC exemptions use the term "generally."  

 

I'm also ignoring for now the potential of accelerating the balance due upon
transfer.  

 

My original advice to client was, if he wanted to be certain it was exempt
except from any REET, he should simply deed out of trust to himself (mere
change of identity) and then gift it to son from him personally (gift).
Title Co rep has indicated that if it is represented as a gift, title co
really doesn't go beyond that and is willing to do deeds for client (deed
from trust to son and then associated deed for sale). 

 

Any expertise is appreciated.  

 

Matthew D. Yates

Attorney at Law

Yates Marshall, PLLC

10000 NE 7th Avenue, Suite 200

Vancouver, WA 98685

Phone: (360) 449-6100

Fax: (360) 449-6111

matt at yatesmarshall.com <mailto:matt at yatesmarshall.com>  (New Email Address)

www.yatesmarshall.com <http://www.yatesmarshall.com> 

 

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