[WSBAPT] Sibling buying out other

Thu Sep 15 15:51:39 PDT 2022

Thanks Nicholas

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Nick Pleasants <npleasants at ohswlaw.com>
Sent: Thursday, September 15, 2022 2:43 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Sibling buying out other

Are there any other estate assets? If sufficient cash in the Estate, siblings can do a non-pro rata distribution of estate giving house to sister and equal value cash to brother. If the estate is mostly just the house, then I would do a PR deed to the siblings 50/50 as tenants-in-common, then do a Purchase & Sale where the sister buys out the brother. If it is the first case where sister can get the house by non-pro rata, then you can have sister assume the mortgage. If it is the second case, sister can still assume the mortgage if she has her own cash to give the brother, or if brother is willing to be paid on a note and subordinate that to the bank’s position. Given the interest rate environment, banks obviously are pushing to force a new mortgage. Garn St. Germain theoretically allows the sister to assume the mortgage, but I can see the bank taking issue if sister gives the brother does a subordinated note.

Nicholas Pleasants | Shareholder

[OseranHahnAttyatLaw 8]

11225 SE 6th Street | Suite 100 | Bellevue, WA 98004
Main: (425) 455-3900 | Fax: (425) 455-9201 | E-mail: npleasants at ohswlaw.com<mailto:npleasants at ohswlaw.com>

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of michael westseattleattorney.com
Sent: Thursday, September 15, 2022 12:27 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] Sibling buying out other

Interesting - thanks

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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 Inge Fordham <inge at fordhamlegal.com<mailto:inge at fordhamlegal.com>>
Sent: Thursday, September 15, 2022 11:59 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: Re: [WSBAPT] Sibling buying out other

I would think you could put the agreement in a TEDRA that both parties sign and, assuming no existing mortgage, sister could purchase the house from the estate in the agreed-upon amount that sister is paying brother.  The transaction would trigger excise tax on 50% of the purchase (as it will obviously be below FMV) and also has gift tax implications.  I don’t see any way around that (but some of our creative colleagues just might).

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Inge A. Fordham | Attorney

Fordham Law, PLLC

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Office: (253) 348-2657 | Mobile: (206) 778-3131

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From: <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> on behalf of "michael westseattleattorney.com" <michael at westseattleattorney.com<mailto:michael at westseattleattorney.com>>
Reply-To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Date: Thursday, September 15, 2022 at 11:38 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Sibling buying out other

Hi,

Two siblings , brother and sister with sister buying out brouther. Bank saying that it has to be sister buying real property from the estate. Will that require them to pay the 1.78% excise tax?  Any way to avoid that like giving real property to sister and have her refinance the real property and just give brother the money?

Thanks

mike

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