[WSBAPT] Advances on Inheritance

Thu Oct 5 15:10:49 PDT 2023

I assume you have probated husband’s will, such as to change title to real property or otherwise; or else have delivered the original to the court for filing.

If so, you have dad’s case number to reference in a simple receipt but just a receipt of a lifetime gift from her because they took nothing at the time of their father’s death . . . as I agree fully with Dalynne, and suggest skipping the whole “receipt and release from her future estate” business.

Instead consider:

-- the amount over $17,000 is a reportable lifetime gift from her to them, period;

-- memorialize the receipt of the $100k checks from wife (no IOLTA needed; she will have check images on her statement or can be sure she prints them out) in exchange for the information she will need to file a gift tax return (name, address, SSN, etc.) and releases of her entirely [see Phil’s intervening email re heirs, estate, etc.] (but not in the form of an advance “standard probate receipt/release” for use in her estate as though they will be devisees entitled to notice, etc.);

-- if you probated husband’s will and their interest is pending still, do get “standard probate receipts/releases” from them as to his probate matter, unless the 4 months dispute period has passed after they received written notice (proved by affidavit filed in their father’s probate matter), and you confirm that they have no remaining interest if the will left them nothing anyhow;

-- change her will immediately/simultaneously to omit them completely – then they are not notice parties at her death – eliminate any need at all for “standard probate receipts/releases” for her;

-- wife needs to file a gift tax return with her 2023 return next year; doing so is smart for lots of reasons (even if not required, in my view, but not worth fighting over if her estate isn’t (going to be 😉) taxable), and her CPA can do that easily with her 1040.

All very worth it for getting these two non-heirs-at-law out of her way.

Optional: in her new will, mention them if you feel compelled but only in a way that does NOT make them notice parties at her will’s probate. Something like the following could work – it need not recite chapter and verse what the release, cancelled checks, gift return all prove without disclosing it all to the world in her will:

I have intentionally omitted my deceased spouse’s sons, Name and Name2. I completed lifetime gifts to them after their father died.

Good luck! Best, Josh

Joshua D. McKarcher
McKarcher Law PLLC
537 6th Street
Clarkston, WA 99403
(509) 758-3345
(509) 758-3314 (fax)
josh at mckarcherlaw.com<mailto:josh at mckarcherlaw.com>
www.mckarcherlaw.com<http://www.mckarcherlaw.com/>

From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Dalynne Singleton
Sent: Thursday, October 5, 2023 2:17 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Advances on Inheritance

I’m thinking a little differently.  If the wife wants to provide those monies now, then she should re-draft her Will and indicate the sons get nothing as they have been paid $100k.
Then, the sons sign a receipt for the gift of $100k each to the wife.  Not sure if there would gift tax to benefit wife but you can check with CPA on that.

Dalynne Singleton
Gourley Law Group
Snohomish Escrow
The Exchange Connection
1002 10th Street / PO Box 1091
Snohomish, WA 98291
360.568.5065
360.568.8092  fax
dalynne at glgmail.com<mailto:dalynne at glgmail.com>
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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 Mark Anderson
Sent: Thursday, October 5, 2023 1:50 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>
Subject: [WSBAPT] Advances on Inheritance

Dear Listmates:

Husband and wife executed mutual wills under which a payout of $100,000 would be made to each of the husband's two sons, but only after both husband and wife had died.  This is all the sons would be entitled to under the wills.

The husband died.  Husband's sons want to be paid now, rather than wait until after Wife dies.  Wife (my Client) says that sufficient funds exist to do this and is willing to make this happen.

My initial thought is to have my Client tender the money into my IOLTA trust account.  I would then distribute the funds to the sons after having them each execute a Receipt and a Release of the Estate and the Personal Representative (whoever that may be) for the advance.  This will require some "custom" drafting of the Receipt and Release in that my Client has not yet died and so does not have a probate estate.  I will also recommend my Client that she update her existing estate planning documents to reflect the payments made and the release of any personal representative may be appointed for a probate estate.

I have got some questions about this.

  1.  Is this the best way to handle this advance?
  2.  What are the tax impacts, if any, for the Client?
  3.  What are the tax impacts, if any, for the recipients?  (Just curious, in case they may want to reconsider their request to be paid now)
  4.  Are there any other considerations in which I should be aware in dealing with this situation?

In advance, thanks for your input on this.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
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