[WSBAPT] IRA, Community Property Agreement, and Credit Shelter Trust Funding

[David Faber]

Clients are a married couple with about $4mil in total assets, most
($2.5mil) of which is held in an IRA, title ownership of which is of the
spouse most likely to die last for a variety of reasons. I would like to
establish a credit shelter trust for use by the spouses at the first death
and want to create the simplest mechanism for the spouse who owns the IRA
to bifurcate and disclaim a portion of the IRA upon the death of the other
spouse. My thinking is to use a Community Property Agreement and, upon the
death of the other spouse, the owner-spouse can present the Community
Property Agreement to affirmatively establish the decedent's ownership
claim on 1/2 of the IRA, then disclaim all or a portion of that 1/2 thereby
transferring it to the credit shelter trust.

Does this make sense? Is there another mechanism allowing us to equalize
assets for funding of the credit shelter trust using a portion of the iRA
if the owner isn't the deceased spouse?

Thank you!

Best,
David J. Faber
Faber Feinson PLLC
800 Polk Street, Suite B
Port Townsend, WA 98368
(360) 379-4110

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