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

[Matt Yates]

Thank you, John.  I presume that the rationale is that if the Trust is revocable and client is sole trustee, than there really is no difference between client gifting it to his son personally or from the trust.  That makes sense.

Thank you also for the advice about doing a resolution as grantor.
Matt


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



From: wsbapt-bounces at lists.wsbarppt.com On Behalf Of John J. Sullivan, Esq.
Sent: Monday, August 17, 2020 7:36 PM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Gift from Trustee/Beneficiary of RLT to Contingent Beneficiary

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 Older ones required distribution out so the grantor could make the gift, for Internal Revenue Code reasons that were repealed.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<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto: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<mailto: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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