[WSBAPT] Canadian Personal Representative?

Mon Sep 20 16:01:48 PDT 2021

According to my law partner Garrett Beyer, who is an international tax attorney, generally, you don’t want to appoint a Canadian resident PR.  If that person is appointed and is not otherwise tax resident in the US, then the estate can be pulled into the Canadian system for tax purposes, resulting in tax potentially due in both Canada and the U.S.  If a Canadian resident is appointed anyway, and an EIN for the estate is needed, the application should be made via telephone or via fax.

Hope this helps.

___________________________

Carla J. Higginson, Attorney
Higginson Beyer, P.S.    [cid:image001.png at 01D7AE38.D0E3CA70]
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HigginsonBeyer.com

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Diane J. Kiepe
Sent: Monday, September 20, 2021 1:42 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Canadian Personal Representative?

Hello,

While statute does not require citizenship to be a factor on who can serve in Washington as a PR, you are correct to note that there may (will be?) issues when PR goes to get a tax ID for the estate.  In theory PR can get a US Tax ID Number but I have been involved with an estate that has been trying for a very, very long time to get a response from the IRS – I wouldn’t do that.  At a minimum I would consider a Co-PR in the US.  The hassle the estate I’m involved in is a nightmare because of non-US citizen PR (I represent a beneficiary trying to get a distribution).

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 Erin Fairley
Sent: Monday, September 20, 2021 11:47 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Canadian Personal Representative?

Hi All,

I’ve seen this question before but can’t remember the answer. Can Client name Canadian relative as PR?  I think the issue is when the PR attempts to get EIN for the estate without SS#?  Work arounds?

Thank you,
Erin

Erin Fairley / Attorney
erin at leschilaw.com<mailto:erin at leschilaw.com> / (206) 353-4625
Leschi Law, PLLC
121 Lakeside Avenue, Suite B Seattle, WA 98122
www.leschilaw.com<http://www.leschilaw.com/>

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From: <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> on behalf of "Sarah J. Dion" <SDion at skellengerbender.com<mailto:SDion at skellengerbender.com>>
Reply-To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Date: Friday, September 17, 2021 at 10:01 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] LLCs and Probate

Makes me feel better than everyone seems kinda uncertain.
Sarah Jael Dion
skellenger bender
ATTORNEY
TRUST AND ESTATE PRACTICE
Estate Planning | Probate

PHONE 206.623.6501<tel:206.623.6501> | FAX 206.447.1973<tel:206.447.1973>
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On Sep 17, 2021, at 6:46 PM, Karen E. Boxx <kboxx at uw.edu<mailto:kboxx at uw.edu>> wrote:
Wouldn’t a provision in the LLC agreement be enforceable under RCW 11.02.091?  you can, for example, include provisions in shareholders agreements that a deceased shareholder’s shares pass to the spouse on death.

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 Sarah McCarthy
Sent: Friday, September 17, 2021 5:03 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] LLCs and Probate

Great input Eric, thank you!
Sarah
Sent by dictation from my iPhone. Please excuse typos and missing punctuation!

On Sep 17, 2021, at 4:45 PM, Eric Nelsen <Eric at sayrelawoffices.com<mailto:Eric at sayrelawoffices.com>> wrote:
I agree that probate is needed unless the estate qualifies for the small estate affidavit process. An LLC interest is intangible personal property and must pass by Will or intestacy.

The basic problem as I see it is, the LLC has to determine to whom it should transfer the decedent’s interest. To do that, the LLC needs a legal justification or authority that determines the proper person; if the LLC tries to decide on its own and gets it wrong, it risks liability to the proper heirs and potentially decedent’s creditors.

I know that many people try to put provisions into an LLC to effect a transfer at death or some other pre-arrangement that would avoid probate. But I don’t think there is any statutory authority for that, unless perhaps the interest is held JTWROS pursuant to the general provisions of Ch. 64.28 RCW<https://app.leg.wa.gov/RCW/default.aspx?cite=64.28&full=true>. Even that I have never tried, never seen it done, and I’m not absolutely sure it would work. So having such a document might backfire, if the proper heirs under the Will differ from the person designated in the invalid TOD document.

Ordinary TOD provisions for specific assets are supported by statutory authority, such as the RCWs governing bank accounts or investment accounts, or the relatively new TOD deed for real property. I don’t know of any provisions in Ch. 25.15 RCW or elsewhere in the incorporation statutes that allow TOD of LLC interests. If there is no statutory authority, any attempt at a transfer-on-death document would be deemed a “testamentary instrument” which would have to be executed in accordance with the Will formalities—basically, a Will specific to the asset, which likely would require probate or at least adjudication of testacy to put into effect.

On the effect of the LLC being a California LLC—I don’t think it matters. Since an LLC is an intangible personal property interest, it’s inherently mobile and considered possessed by the decedent at the decedent’s domicile for purposes of determining jurisdiction. So long as the LLC management recognizes the authority of the PR to assign the interest, the CA court doesn’t need to get involved. After all, there is no State-run registry of LLC ownership the way vehicle certificates of title are done.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

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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 Sarah McCarthy
Sent: Friday, September 17, 2021 3:30 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] LLCs and Probate

All --

A few questions related to planning around multi-member LLCs after an LLC member passes:

1.  I'm looking for a confirmation or clarification of the following understandings:  It's my understanding that probate is generally needed to legally transfer an LLC member's interest in the LLC, unless the member had a RLT and had previously assigned to the trustee of the RLT all of the member's interests in the LLC.   I note that RCW 25.15.251(6)(b) talks about a member's "transferable interest" being "held in a trust or estate," or being "held by a trustee, personal representative, or other fiduciary."

So, I take this to mean that, once an LLC member dies, assuming there is no RLT in place, generally, in order to transfer the LLC member's interest according to the will or by intestacy, in that case we need to file a probate in order to have a PR appointed, and that court-appointed PR THEN has the necessary legal authority to sign an "assignment" of LLC interests to the appropriate heir/beneficiary, which would be maintained on file with the LLC records.  (Though if the LLC interest fell below $100k in value, I imagine a small estate affidavit could work, since the statute also states that an LLC member interest is "personal property." RCW 25.15.246(1).)

2.  Is there an easy work around to this issue?... Are there provisions that can be included in an LLC Operating Agreement that could provide for/authorize some genre of "transfer on death certificate" that each member could sign in advance of death, and file with the LLC records, which the LLC manager could then effectuate upon a member's death, without a PR needing to be appointed for the member's estate? I'm looking at RCW 25.15.246, which seems to provide for a means by which an operating agreement can authorize the issuance of certificates of interests to a transferee... I'm wondering if the probate is truly necessary, if the members can agree on a means of addressing this issue in advance by means of the operating agreement, or a buy-sell agreement.  Kind of like a revocable transfer on death deed that we can record in advance for real property.

I have these questions for Washington LLCs, as well as for Washington residents who hold member interests in LLCs in other states, such as CA... (though I do realize that LLCs are creatures of state law, so a review of the CA LLC statutes may be necessary...)

3.  Does anyone know, under California law, is an ancillary/California probate needed in order to appoint a CA-PR to transfer CA LLC member interests?  Or, can we assume that a Washington probate will suffice, to appoint a Washington PR, who would then have authority to assign out member interests in the CA LLC?

Thanks for any input!

Sarah

Sarah O’Farrell McCarthy

(Pronouns: she / her)
Attorney | Kelly, Arndt & Walker, Attorneys at Law, PLLP
P.O. Box 290 | 6443 Harding Avenue | Clinton, WA  98236

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