[WSBAPT] Wash Estate Tax - Credit Shelter Trust Wills

[Joshua McKarcher]

Josh,

Here is my take, and I’ll be very glad for any corrections or endorsements from others:

Assuming the credit shelter trust is funded and “for real” after the first spouse’s death, I cannot imagine why it would not work.

If you’re asking if Washington recognizes “portability” like the feds do – which essentially allows the surviving spouse NOT to fund such a trust and his/her estate to claim both spouses’ FEDERAL exemptions after his/her death – then the answer is “no” Washington does not have “portability.”

So the Washington ~$2.2 million exemption is “lost” if not used at the first spouse’s death, and the second spouse still only gets a ~$2.2 million exemption. This is a huge trap for those who do not know better.

But the use of a credit shelter trust is one way to “use” the exemption of the first spouse to die.

All the best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.com>

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Josh Grant
Sent: Monday, February 1, 2021 3:35 PM
To: wsbar trust <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Wash Estate Tax - Credit Shelter Trust Wills

I have a client with wills written in early 1990.  They are credit shelter wills.  Estates total about $4,00,000.  I have heard that the Washington  department of revenue, considers the full value as taxable to the surviving spouse, notwithstanding the federal estate tax would allow the second to die to be “sheltered” from taxing the 1st to die’s part that went into a credit shelter trust for the benefit of the surviving spouse.  Anyone have any details on this? Authority? Thanks
Joshua F. Grant
[advocates]
P. O. Box 619
Wilbur, WA 99185
509 647 5578
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