[WSBAPT] Pre-Death TEDRA?

[Joshua McKarcher]

Brent,

First off, this is exactly the kind of peacekeeping and creative, proactive lawyering we should all be doing. So, bravo you. (Not that you need my accolades, but life is short, so…)

Second, I don’t have a concrete answer, but I sure wish I had time today to go look at the statutes to see what I’d fine. Assuming you have all interested parties “onboard,” I would start by looking at TEDRA statutes to see if anything limits it to post-death intestacy administration, probate, and trust matters; and I guess at adult guardianship/conservatorship statutes to see if they prohibit something like “all interested persons” from agreeing to something that maybe a court can then simply approve upon petition on the ward’s (is that still the word?; I don’t engage those statutes, so forgive my ignorance) behalf without appointment of a formal GAL.

If one of those was a blockade, I would think through whether all parties EXCEPT the dad without capacity could enter into a non-TEDRA good old fashioned settlement and release that would bind them all and provide for injunctive relief and damages if any party challenged an outcome (in probate court or a trust administration, say) that “matched” the provisions stated in the settlement/release. Unless some relevant law prohibited such an agreement, I don’t know why parties with capacity could not agree.

Now, atop all of that are tax agencies, which couldn’t care less about any of the above. All of this seems much easier if there are no estate tax, significant income tax (but you mention RMDs), and other “tax shifting” going on that would reduce taxes payable to some state or federal agency. If the result is just shifting taxes from Person A to Person B, and not evading taxes, then I would at least continue my consideration of the option I identify in the first steps above. Otherwise, I’d switch to focusing on what would be required – and if it would even be possible with dad’s incapacity – to achieve the desired outcome if it’s unavoidably going to cause a tax problem the parties cannot simply “draft around.”

So, that may all be “duh Josh” material. And, if so, my apologies. But if it helps identify (initial) issues, then great!

I’d love to hear how you proceed if everyone remains friendly and nobody discovers something to fight about while you set upon this worthy endeavor!

Best, Josh

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Brent Williams-Ruth
Sent: Monday, November 13, 2023 4:46 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com>
Subject: [WSBAPT] Pre-Death TEDRA?

Greetings List Members -

Here is the situation: blended family for multiple decades. Originally had a pre-nup drafted at the start of everything due to kids from each side....well, the parents have lasted into the 80's and 90's. Sadly, one is completed demented without any capacity.

As the children of the wedded couple have been talking and helping their parents out (they are a functional blended family - at this time - and everyone is helping everyone) it has been discovered that Dad did a great job keeping separate separate. Mom, not so much. Example, her RMD's from her separate retirement have been going into the joint checking.

Additionally, there is property that was left to go to the wife, if she survived by 30 days otherwise it would be separate property of the husband and go only to his kids.

All things that seemed great 30 years ago but now, not so much.

The question - since the parties to the pre-nup are not both capable of making legal decisions and there is a generic POA my question is two-fold
1) can a general durable POA sign a new pre-nup on behalf of the principal?
2) Can the kids get together and do a TEDRA-style agreement that is enforceable later when the death's occur or do they need to just wait until the actual time arrives to take any action?

Again - the good news is that there is no animosity of the parties. Just a realization that the parents never updated documents from prior to their marriage despite saying they would over and over again through the years.

Appreciate any insights!

Brent

Brent Williams-Ruth (pronouns: he/him)
Attorney-At-Law

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