[WSBAPT] Will Question - life estate

[Lewis, Amy C.]

Well said Josh!


Amy Lewis, Attorney
Pronouns she/her/hers
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909 A Street, Suite 600 | Tacoma, WA 98402
phone 253.572.4500 | fax 253.272.5732 | www.eisenhowerlaw.com<http://www.eisenhowerlaw.com/>
From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Joshua McKarcher
Sent: Saturday, September 10, 2022 12:07 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Will Question - life estate

Hi Dalynne,

I'm not sure if Bruce was gently encouraging you away from a life estate solution 😉, but I "do these" in trust with separate plain English paragraphs about what happens if wife dies first vs if husband dies first.

A judge can read that, hear the facts, and make a reasonable judgment if needed, if there is a problem. No overlay of decades of complex life estate case law required.

Agreed post-signing changes require no vesting and title review and no excise tax mental gyrations. No reference to life estate rules and case law and "all of it." Agreed changes require a simple signed paper meeting the requirements of a trust amendment or TEDRA agreement, whichever is applicable.

Well drafted trust provisions, in my mind, are far better solutions than life estates. I'm guessing others out there have mastered doing this with life estates with some additional language on the face of the deed or a side agreement or something. If so, no problem. This is my bias.

If wife survives, she can be trustee; and maybe they don't mind if she retains the right to cut son out then if he goes sideways. Most husbands in this scenario sitting in my office would say, "Of course she can change her mind! It's me we don't want changing his mind."

If husband survives, he and son can be co-trustees perhaps, although husband can still be sole trustee, but with the duty to follow the trust. A duty enforceable by the son in the same superior court they'd end up in with a life estate -- but in a simpler TEDRA action intended to instruct a trustee based on well-drafted plain English trust provisions vs life estate case law.

Write in plain English in each paragraph noted above what happens if one of them sells before both are dead — who gets the money? Think through the scenarios and do not leave anything to two (non-spouse) people who must unanimously agree -- that's just begging for deadlock. Judges need simple clear language they can hopefully enforce without too much rigmarole when someone simply refuses to abide the trust agreement because they've changed their mind.

Then make darn sure husband knows that, if he survives wife and is sole trustee, he has fiduciary duties to FOLLOW the trust or he WILL LOSE in court if son or son’s guardian, etc., sue to enforce. Heck, have them recite in a purpose paragraph near the beginning of the trust what they intend by the provision further down in the trust and that they expect it to be enforced as provided. There is no law against him having a companion live there, so long as he doesn't trash the place, purport to title it to the companion, sell it without abiding the trust, etc.

If I set these couples up with clear expectations and understandings about their duties to "follow this OR YOU WILL LOSE IN COURT, and you will need a different lawyer than me to 'break' this thing," then I see their mental assent and the "click" in their brain. Then they read the plain English "rule book" in the trust provisions re the house. They "get it" and sign it -- and then I've had zero problems when it comes time for it to "work."

Good luck! All the best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.com>
________________________________
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 Bruce Moen <brm at moenlaw.com<mailto:brm at moenlaw.com>>
Sent: Saturday, September 10, 2022 12:22 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Will Question - life estate

Hi Dalynne,

You are not overthinking this.  The life estate is a simple concept, but are the subject of many issues we which arise in the years following the conveyance.

If you decide to create the life estate for your client(s), then I suggest that you survey the case law of litigation between life estate holders and the persons with a remainder interest. Organize the litigation into subdivisions such as economic waste (failure to maintain the property), damages (house burns down and the life tenant and the remainderman each mistakenly thought that the other had it insured), allocation of short-term vs long term repairs for an elderly life tenant, many other issues.  After you have catalogued the areas of disputes, then review each area with the client and what to draft for each area.  I think that's the best that we as lawyers can do.

Important caveat: When the client says "Oh, my [spouse], [issue], [others] would never do that." Remind the client that that any of the players may change and have no control over the issue.  An example would be that a trusted family person has a stroke or a head injury and ends up with a Conservator or a GAL who is ready to litigate over some past event. The client's focus during the consultation should be shifted from the trusted family member to strangers who may stand in their shoes at some point.

Good luck!

  Bruce Moen

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 Dalynne Singleton
Sent: Saturday, September 10, 2022 10:24 AM
To: 'WSBA Probate & Trust Listserv' <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Will Question - life estate

I have some Wills I am preparing and wanted to see how others might approach this situation.
Clients are married (wife 4th marriage, husband 1st).  Wife has one grown son, Husband had no children.
H/W own a home on Camano Island jointly.  They both want son to receive home when second spouse dies.  But, when first spouse dies, H or W will continue to reside in home until they move or die, or house is sold.

I am considering recommending a life estate transfer of the home to the son with life estate in H/W.  Both H/W in their 60s and health is good.
This seems better than placing the CP interest of the first spouse into a trust for the benefit of the surviving spouse where upon the 2nd spouse to die death, the house goes to son.
If house is sold before 2nd spouse dies, CP interest monies will be paid to the son.

The fear is from the wife if she dies first, her husband will remarry and not provide son with her share of CP home – doesn’t life estate to both H/W with deed to son handle this issue?
What if after deed with life estate, H/W sell home?  Will the son then be entitled to any monies from sale?  How to protect the H/W in this case?
Am I overthinking this?

Dalynne Singleton
Gourley Law Group
Snohomish Escrow
The Exchange Connection
1002 10th Street / PO Box 1091
Snohomish, WA 98291
360.568.5065
360.568.1717  fax
dalynne at glgmail.com<mailto:dalynne at glgmail.com>
Website:  www.glglawgroup.com<http://www.glglawgroup.com/>
As we face the challenges presented by COVID-19, Attorney/client meetings will be handled by teleconference or virtually whenever possible.  I am working remotely and available by email, telephone, in-person or zoom.  If you would like to set a conference with me, please call or email my paralegal theresa at glgmail.com<mailto:theresa at glgmail.com>, angelina at glgmail.com<mailto:angelina at glgmail.com> or cameron at glgmail.com<mailto:cameron at glgmail.com>.
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