[WSBAPT] Estate Distribution Issue re: Excise Tax

[Bryce Dille]

Since it is a estate expense and assuming he is a 1/3 heir to avoid the issue as described in your e-mail why doesn't he pay 1/3 of the excise tax by agreement  and then have the other 2/3 of the excise tax chargeable 1/3 each to the other two heirs. Therefore his share will not be reduced by the amount of the excise tax when it is paid out and will not affect what he pays for the property.

Bryce H. Dille
Dille Law, PLLC
2010 Caton Way SW Ste. 101
Olympia, WA 98502
Office: 360-350-0270
Cell: 253-579-5561

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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Jane Bitz
Sent: Friday, January 26, 2024 4:00 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Estate Distribution Issue re: Excise Tax

Hi All:

I have an estate where a beneficiary is going to receive a parcel of real estate that exceeds his share of the estate. He is going to pay the difference between his inherited share and the price of property. My issue is that when we calculate the Excise Tax (calculated on the amount paid, not the property value) and include it as an estate expense (seller's cost), it decreases the beneficiary's share that will be distributed, so it increases the amount he has to pay in to the estate and thus, increases the amount of the excise tax payable.

Is there any simple way to "fix" this issue? I have considered just having him pay "more" than is required to equalize the distribution and then rebate any extra in the estate back to him. This means he is "paying" more than he has to for equalization and the estate is paying more in excise tax on the transaction.

Wondering if anyone else has run into this particular issue?
Thanks.
Jane.

Jane Bitz
Of Counsel
Helping Good People do Great Things!
12209 E. Mission Ave., Suite 5
Spokane Valley, WA 99206
(509) 927-9700 (Phone)
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