[WSBAPT] California Bypass Trust

[Philip N. Jones]

In response to the numbered paragraphs:

1.       I do not understand the last sentence of paragraph 1.  What amount would be pulled back in to Wife's estate, and why?

2.       I can't see filing a Washington estate tax return for a California resident with no ties to Washington.

3.       I doubt that a TEDRA agreement would bind the Washington Dept. of Revenue, although I am not sure they have an interest here.

4.       Perhaps after the credit shelter trust is created in California, it could have its situs changed to Washington.  That is an income tax matter that most likely does not change the estate tax consequences.
Phil Jones
Portland, OR

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Diane J. Kiepe
Sent: Monday, March 02, 2020 3:28 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] California Bypass Trust

So, there a couple issues that you want to think about.


  1.  It depends.  The first thing you need to do is read the document.  If it was a document that planned for funding up to the Federal exemption you are not limited by the state exemption in anyway.  But then when W dies that federal amount gets pulled back in and we don't like that.
  2.  I would contemplate filing a protective WA State Return with a zero QTIP election and a 100% WA State Exemption and including the Federal Return for that.
  3.  Another thought is to read the document and see if you can change situs before any funding.  Change the situs and then have all parties sign a TEDRA that might keep all interests protected but optimize state tax planning matters.
  4.  I would consider not using CA law to govern the new trust and calling it a CA Trust - CA is trying all sorts of new ways to tax income and if you don't relocate the situs of the trust I suspect they will try to tax it's income.  Plus the accounting rules in CA are burdensome I hear.  I am not licensed in CA.

These are just some thoughts that pop into mind - always happy to dialogue.

Best,


Diane J. Kiepe

Diane J. Kiepe
Douglas Eden
717 W. Sprague Ave.
Suite 1500
Spokane, WA  99201
djkiepe at depdslaw.com<mailto:djkiepe at depdslaw.com>
509-455-5300



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 Lovie Bernardi
Sent: Monday, March 2, 2020 3:15 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] California Bypass Trust

Dear Listmates,

California resident, plans to move to Washington. Husband died, they had an A/B trust, total assets of couple approximately $13 million. Client's California attorney calls to find out how much of husband's share can be sheltered from Washington estate tax if it put into a bypass trust in California prior to move. Is the amount sheltered from Washington estate tax limited to Washington's exemption amount if surviving spouse is domiciled in Washington at the time of her death?

Lovie

Lovie L. Bernardi
Flaherty & Bernardi, PLLC
3600 15th Avenue West #205
Seattle, WA  98119
(206) 682-2616

lovie at fb-lawfirm.com<mailto:joni at sbfirm.com>
http://fb-lawfirm.com<http://sbfirm.com/>

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