[WSBAPT] Trust Admin: Sub-Trusts

[Philip N. Jones]

I vote with Diane.  Many clients do it that way, despite the risks.  They don’t want to tie the hands of the survivor.
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 Diane J. Kiepe
Sent: Monday, July 12, 2021 9:20 AM
To: Tom Garvey <tgarvey at haniganlaw.net>; WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Trust Admin: Sub-Trusts

Hi Tom,

If I were to guess, based on my experiences, the client (H&W) decided that the survivor would “do the right thing” and provide for both sides at death – didn’t want to be forced into tax planning but have it available.  In the alternative, the Trust may have been drafted to hold limited assets (such as one piece or so of AZ property), although that doesn’t sound like your situation.

I always note in my file that I have remined H&W that the survivor could change the ultimate distribution of both estates unless a fixed trust is formed on death or spouse 1.

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 Tom Garvey
Sent: Monday, July 12, 2021 9:12 AM
To: WSBAPT at lists.wsbarppt.com<mailto:WSBAPT at lists.wsbarppt.com>
Subject: [WSBAPT] Trust Admin: Sub-Trusts

I am administering a Trust drafted in Arizona. The provisions call for the entire estate to go into a sub-trust/Survivor Trust on the death of the first spouse minus what the survivor disclaims for tax purposes (which, in this case, will be $0.00 because the estate is under 1 million). The Survivor Trust is revocable.

From a policy perspective I'm not quite understanding the point of the Survivor Trust. The couple had a blended family, so I feel like the deceased spouse's share should be locked up and irrevocable somehow so that his kids are taken care of. But no, the entire estate is to pass into the Survivor Trust, and leaves the survivor the option to modify or cancel the whole thing. And, she is planning to do so and change the beneficiaries.

Does anyone know why the original Trust would allow that?  I know the AZ lawyers who drafted it at the time (20 years ago) may have had their reasons, but it does not seem like the parties would have agreed to the survivor changing the bene's, almost like a reciprocity argument applies here.

Thanks in advance for reading.

Tom Garvey | Attorney
Hanigan Law Office, PS
68 Main St. / PO Box 39
Cathlamet, WA 98612
(360) 795-3494
(360) 795-3001 - fax


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