[WSBAPT] Part of the Gross Taxable Estate?

Fri Oct 7 16:29:38 PDT 2022

Late to the party here, but I have always (knock on wood) gotten the information and document that I need from a custodian by educating them on the PR’s access and authority for every scrap of paper and account information detail up to the decedent’s date of death as being property of the decedent, including signed beneficiary designations and date of death account values, no matter who the named beneficiary is.

Then, if needed, we can follow up with the named beneficiary if they are not forthcoming and educate them further on tax reporting/filing requirements because now we know who they are (if we didn’t before).

Happy Friday!
Alexis
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Philip N. Jones
Sent: Wednesday, October 5, 2022 1:21 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Part of the Gross Taxable Estate?

Yes, yes, and yes.  This is an area where dysfunctional families create all the fun in practicing law.   The law is not well-developed and attorneys tend to disagree on the proper procedure, as indicated in this string of posts.  The only good news is that the issue does not surface regularly, in my experience.
Phil Jones
Philip N. Jones
Duffy Kekel LLP
Portland, OR
pjones at duffykekel.com<mailto:pjones at duffykekel.com>
(503) 853-1482 cell

On Oct 5, 2022, at 4:42 PM, Brent Williams-Ruth <brent at williams-ruthlaw.com<mailto:brent at williams-ruthlaw.com>> wrote:

This has been extremely helpful and insightful. Sadly, the one thing that has not been accounted for is when the family absolutely is at odds with each other and refuse even basic civil conversation. Everything is met with suspicion and claims of misdoing.

Thank you for the dialogue.

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

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On Wed, Oct 5, 2022 at 7:01 AM Philip N. Jones <pjones at duffykekel.com<mailto:pjones at duffykekel.com>> wrote:
Yes, this is a difficult question., although it does not come up often.  You might be able to talk the financial institution into disclosing the name of the charity, but probably not.  One possible solution:  charities like to send thank-you acknowledgements to the family.  Ask the family members to watch their mail closely.
One piece of good news is that naming a charitable beneficiary to an IRA or a life insurance policy results in a 100% offsetting estate tax charitable deduction.  So if you are unable (for lack of information) to include the asset on the estate tax return, you will also be unable to take the equal offsetting estate tax deduction.  Thus the taxable estate and the tax will be exactly the same both ways, and you will have no extra tax to pay, and no interest, and no penalty.  So if the family discovers years later that Mom left a billion dollar life insurance policy to the Red Cross, the tax does not change one cent.  No need to lose sleep.
But if Mom left a billion dollar life insurance policy to her sister, you have big problems if you cannot get information about the policy.  But as I said, this problem rarely surfaces.  I have never encountered it.
Phil Jones

Philip N. Jones
Duffy Kekel LLP
Portland, OR
pjones at duffykekel.com<mailto:pjones at duffykekel.com>
(503) 853-1482 cell

On Oct 4, 2022, at 6:35 PM, Lewis, Amy C. <ALewis at eisenhowerlaw.com<mailto:ALewis at eisenhowerlaw.com>> wrote:

Plus, what if the beneficiary is a charity that would qualify for a charitable estate tax deduction.  How would the PR know that if the financial institution won’t disclose that information?

Amy Lewis, Attorney
Pronouns she/her/hers
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909 A Street, Suite 600 | Tacoma, WA 98402
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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 Diane J. Kiepe
Sent: Tuesday, October 4, 2022 8:46 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Part of the Gross Taxable Estate?

I have been fortunate in that I have never gotten push back from an institution for a copy of date of death statements when I explain they are required for tax filings and that the PR has a duty to report the value of the account on the tax return.  If I were to get push back, I would not hesitate to file a pleading and seek fees.  A personal representative, in my opinion, stands in the shoes of the decedent for all final reporting purposes.

I realize institutions like to think they know what the law is but sometimes they need re-educating.

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 Philip N. Jones
Sent: Tuesday, October 4, 2022 12:03 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Part of the Gross Taxable Estate?

I think the PR will have difficulty getting information about the IRA directly from the IRA custodian (the financial institution), since the IRA now belongs to the beneficiaries.  It does not belong to the PR.  The beneficiaries are now the only people to whom the custodian will release information regarding the account.  But perhaps the PR can find a copy of the monthly statement for the month of death and use that statement to prepare the estate tax return without obtaining any additional information from the custodian.
Sone custodians are more lax in this department and will release information, but they really aren’t supposed to.  For example, if the IRA is one of several accounts held on the date of death by the decedent in a master umbrella account, sone financial institutions will give the PR a copy of the entire statement, without stopping to think that the PR doesn’t really own the IRA.  The beneficiaries do.  In Brent’s case, the financial institution disclosed the brokerage account, but not the IRA.  That is exactly how it is supposed to be done. The financial institution did it right.
Phil Jones
Philip N. Jones
Duffy Kekel LLP
Portland, OR
pjones at duffykekel.com<mailto:pjones at duffykekel.com>
(503) 853-1482 cell

On Oct 4, 2022, at 1:37 AM, Heather de Vrieze <heatherd at westseattlelaw.com<mailto:heatherd at westseattlelaw.com>> wrote:

Yes, part of GTE.

No, distributing it outside of probate does not remove it from the taxable estate.

Personal Representative should be able to get info, though you might need to send a letter explaining this.

Heather

Heather S. de Vrieze
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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 Brent Williams-Ruth
Sent: Monday, October 3, 2022 5:19 PM
To: wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Part of the Gross Taxable Estate?

Greetings List -

Have a probate where Decedent set up beneficiary for his brokerage and his traditional IRA. The brokerage house disclosed the brokerage distribution but did not disclose the IRA. In a conversation with Executor believe each residual beneficiary received the same amount. If this is true - the estate would surpass the Washington estate tax threshold - if a traditional IRA transferred through beneficiary is counted as part of the GTE.

Simply by distributing outside of probate does not remove it from the gross taxable estate, correct?

Brent Williams-Ruth
Attorney-At-Law

Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

Office/Scheduling Phone: (253) 285-7751

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