[WSBAPT] Testamentary Trust

[Philip N. Jones]

I suggest that you go back to the original cause of action/complaint, and see what you were suing for.  If it was a combination of wrongful death and survivorship (pain and suffering), then it will be difficult to now take the position that it is now 100% one or the other.  The IRS is not very friendly towards people who change their tune in order to reduce the taxes.
On the tax side, are you referring to income taxes or estate taxes?  You need to examine both and be certain of your conclusion.  It is my recollection that survivorship proceeds are subject to estate tax, but wrongful death proceeds are not.  But check for yourself.  And look into the income taxes.  My hunch is that no income taxes are owed, but check for yourself to make certain.
I express no opinion on your other questions.  Find someone who does lots of wrongful death.
Phil Jones

Philip N. Jones
Duffy Kekel LLP
900 S.W. Fifth Ave. Suite 2500
Portland, OR 97204
pjones at duffykekel.com<mailto:pjones at duffykekel.com>
(503) 226-1371 – office
(503) 853-1482 – cell
(503) 226-3574 - fax

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Andrekita Silva
Sent: Tuesday, November 17, 2020 4:25 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Testamentary Trust


Law Office of
F.ANDREKITA SILVA
________________________________________________________________________

.                                                                                      November 17, 2020


List serve,

                 I understand that the proceeds from a wrongful death action do not belong to the estate, rather to the beneficiaries (thank you to Eric Nelsen for a really great summary on this issue earlier this year). I also understand the proceeds from a survival action are more of a muddle. I know there are no taxes for pain and suffering experienced by the decedent for a physical injury.
                 I’d like to close the probate with a Declaration of Completion. Without the survival/ wrongful death action, the estate had extremely modest assets and we settled with all creditors. But, the Declaration of Completion must say all U.S. and Washington estate tax due as a result of Decedent's death have been determined, settled, and paid.
               So, if we decide that settlement proceeds are for pain and suffering of the decedent, can I assume that this statement about taxes applies to only the Estate?   This has nothing to do with any taxes that the beneficiary might owe in their own U.S. state or foreign country?
               The proceeds from the survival/ wrongful death action are in my trust account.  I would prefer to pay the net proceeds to the personal representative for HER to distribute to the beneficiaries (herself and her brother.) They are in agreement as to how much they will each receive.  My main concern is to avoid liability for myself if there is a tax issue down the line.  Is this okay to do?

andrekita
Law Office of F. Andrekita Silva
1325 Fourth Avenue, Suite 2000
Seattle, Washington 98101
206-224-8288
www.seattle-silvalaw.com<http://www.seattle-silvalaw.com>





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