[WSBAPT] how to do non pro rata distribution of CP to get 100% of CP House into testamentary trust

[Jane Bitz]

Chandra:

I hope that the surviving spouse is not acting as the Personal Representative of her husband's estate?

I would have the PR do an Inventory that shows all of the probate and non-probate assets and the disposition of those assets showing that the value going to the surviving spouse is equal to or more than the value of the house.

Then the Trustee of the SNT can sign a TEDRA agreeing to the distribution of the house as a non-prorata distribution of the deceased spouse's one-half of all the community property to the SNT.

Don't have the surviving spouse sign a quit claim to the SNT. That will be very hard to explain to DSHS if the surviving spouse spends down her one-half of the assets and is making a Medicaid application.

My 2 cents.
Jane.

Jane G. Bitz
Of Counsel
Wolff, Hislop & Crockett, PLLC
12209 E. Mission Ave, Suite 5
Spokane Valley, WA 99206-4824
(509) 927-9700 x126
FAX: (509) 777-1800


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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Derek Jensen
Sent: Tuesday, May 23, 2023 6:02 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBAPT] how to do non pro rata distribution of CP to get 100% of CP House into testamentary trust

Following.

I don't have a definitive answer to this, but it has come up occasionally for other reasons. One innovative solution I saw was a CPA that left everything to the deceased spouse. I assume that was to fund a testamentary SNT. This may be standard for elder law attorneys.

Sincerely,

Derek W. Jensen, JD, LLM
Jensen Law Office, PLLC



________________________________
From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> on behalf of Chandra Lewnau <chandra at lewnaulaw.com>
Sent: Tuesday, May 23, 2023 11:56 AM
To: WSBA Probate & Trust Discussion List <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] how to do non pro rata distribution of CP to get 100% of CP House into testamentary trust


I'm trying to determine the best way to fund 100% of a Decedent's CP house into a SNT for the surviving spouse, effectively getting a non-pro rata division of the community property and protecting as much of the assets in the SNT as possible. Decedent's Will leaves everything to a SNT for the surviving spouse. But, there is very little probate property other than the house. Almost all her other assets are either in retirement accounts with beneficiary designations or in a JTWROS account. To fund the SNT with 50% of the community property, I need to get 100% of the house into the SNT. I know the whole of the community property is subject to probate administration for things like paying debts and the family award, but I don't believe this extends to the power to convey the survivor's interest in the house. How do I get the surviving spouse's interest in the house into the SNT? I don't want issues with a title company on a later sale and I don't want DSHS to look at the SNT as a partly self-settled trust.



The best idea I have so far is to have the surviving spouse quitclaim his interest to the estate. If that works, what tax exemption do I use? WAC 458-61A-215(b)? "An heir to an estate gives the estate a quitclaim deed for the purpose of removing any presumptive interest they have in the estate." I looked at the exemptions for creating CP/establishing SP and for non-pro rata distributions and they didn't seem quite right.



Should I back up whatever I do with a TEDRA agreement?



Any advice is appreciated.
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