[WSBAPT] Sibling buying out other

[Lewis, Amy C.]

If there are other assets in the estate, you may be able to make a non-pro rata allocation of estate assets so that the sister gets more than 50% of the residence and the brother gets other assets.  We have done that to minimize the purchase portion and the excise tax.


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 Inge Fordham
Sent: Thursday, September 15, 2022 12:00 PM
To: WSBA Probate & Trust Listserv <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
3218 Sixth Avenue | Tacoma, WA 98406
Office: (253) 348-2657 | Mobile: (206) 778-3131
www.fordhamlegal.com<http://www.fordhamlegal.com>


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From: <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> on behalf of "michael westseattleattorney.com<http://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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