[WSBAPT] Tax Implications re Disclaimer or TEDRA

[Heather de Vrieze]

Inge,

Unless there is some provision in the Will that would direct son’s share elsewhere, if you are within 9 months of dad’s death, a disclaimer by son would be a great way to get this property to the daughter.

I’ll defer to the tax gurus, but believe that unless there is a real dispute that is being settled by the execution of a TEDRA, the agreement does not change the fact that son is making a gift to daughter and a 709 would be required. At least that is what I would advise a client. If it is settlement of a real dispute, the analysis might be different.

My two cents on a warm afternoon.

Heather

Heather S. de Vrieze
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Inge Fordham
Sent: Wednesday, August 24, 2022 4:00 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Tax Implications re Disclaimer or TEDRA

Colleagues,

I do not profess to be a tax guru – in fact, I always tell my clients to consult with a CPA on tax matters.  With that said, I have a relatively simple situation that I hope has a simple answer.  Situation is as follows: widowed father dies testate.  Will says estate is to be split equally between son and daughter.  Assume for sake of this hypothetical that the sole asset of the estate is a parcel of real property.  Son wants the property to go to daughter (his sister).  He has no children.  There are no other siblings involved.  In this situation, it seems son could simply disclaim his interest and PR (who happens to be son) can simply transfer the parcel to the daughter.  Are there any tax implications with the disclaimer?  The alternatives I see are: (1) PR transfers the real property to son and daughter and then son gifts his half to sister (which necessitates the filing of a form 709); or (2) son and daughter execute a TEDRA Agreement allowing PR to transfer the property solely to daughter (would that still require a form 709)?

Thank you,

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Inge A. Fordham | Attorney
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