[WSBAPT] Unneeded Credit Shelter

Tue Apr 19 10:47:21 PDT 2022

Hello Michael

With the real estate market in Spokane and suspected increase in rates, inflation, etc.  I have one probate-valued by the same probate that saw a 150k increase in about 3 months.  I have always, historically felt comfortable with a sale in a reasonable time being used and disclosing that on the return - that was until the last two years.

All that to say that I wouldn’t necessarily say you’re wrong-but in todays market conditions it may be different.  Also for fast appreciating property it comes down to who may get more money-in a WA taxable estate the increased value based on sale price= Higher estate tax, lower or no capital gain to beneficiary.  If lower value, so capital gains results individual beneficiaries will likely report that on 1040-can be favorable particularly when multiple beneficiaries are sharing in the gain.

Have a great day
Sent from my iPhone

On Apr 19, 2022, at 10:20 AM, michael westseattleattorney.com <michael at westseattleattorney.com> wrote:

Q; You mentioned lapse of months. Previously, I had been told that if a real property was sold within nine ,months of death, the value at death was the sale price. With the rapid increase we were seeing , likely to now slow with increasing interest rates, a sale within 6 months could be the value at death - is this not the case? Mike Atkins

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________________________________
From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Diane J. Kiepe <DJKiepe at depdslaw.com>
Sent: Tuesday, April 19, 2022 8:49 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Unneeded Credit Shelter

Anytime I vary from the directions of the Will, I TEDRA.  In this case, you indicated all beneficiaries are the same (common) but I still would memorialize it in a TEDRA.  I would also suggest, the assets that would have funded the credit shelter trust have one basis and the assets of the surviving spouse may very well have a different basis due to the lapse of months (particularly with real estate and investment accounts in this day and age) and I would want my clients to understand why – adding this to my TEDRA.

Best of luck.

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 <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Marcus J. Fry
Sent: Monday, April 18, 2022 11:14 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Unneeded Credit Shelter

Shannon:

My 2 cents. If it is clear that both estates combined would be under the exemption, then I have no concern with distributing directly to the heir from the estate.  However, if the CST is needed to avoid any confusion about the 2nd estate exceeding the exemption limit, then I would do a TEDRA or at least a written understanding between the trustee and beneficiary that outlines what has transpired to document the situation in case questions later arise.

Marcus J. Fry
Attorney | Witherspoon • Kelley
mjf at witherspoonkelley.com<mailto:mjf at witherspoonkelley.com> | Attorney Profile<https://www.witherspoonkelley.com/marcus-j-fry> | vCard<https://www.witherspoonkelley.com/s/mfj.vcf>

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222 N. 3rd Street
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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 Shannon Jones
Sent: Monday, April 18, 2022 10:57 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Unneeded Credit Shelter

Listmates, What is the recommended course of action when you have a revocable living trust requiring funding a creditor shelter trust, first spouse dies and surviving spouse then dies only a few months later, and we have a total estate well under the WA estate tax exemption? Credit Shelter and Survivor’s Trusts all end up distributing to the same persons. Do we have to fund the credit shelter when it accomplishes no useful purpose? If we don’t fund the credit trust, do I need a TEDRA? Shannon

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Shannon R. Jones | Attorney

Campbell Barnett PLLC

Direct:  253.848.3515

Office: 253.848.3513| Fax: 253.845.4941

317 South Meridian

Puyallup, WA 98371

shannonj at campbellbarnettlaw.com<mailto:shannonj at campbellbarnettlaw.com>

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