[WSBAPT] Transferring surviving spouse CP to a credit shelter trust?

[Stromberg, Spencer]

Hi Sara -

I think you're on the right track, as that case points out.  I think I would have the surviving spouse sign a separate deed - you could accomplish the 100% transfer with one properly worded deed, signed by both the PR and surviving spouse (and signed 2x if surviving spouse is PR), but I think it's cleaner to have them be separate documents with separate Real Estate Excise Tax Affidavits (and different excise tax exemptions).

The estate tax return should just reflect the decedent's ½ interest - the surviving spouse's interest is not part of the estate. The important thing to convey to DOR is the value of the portion owned by decedent and included in the estate - for purposes of the estate tax return, they don't care that the other ½ interest is also being put into the trust.


Spencer A. W. Stromberg
Director
601 W Riverside Ave, Suite 710, Spokane, WA 99201
T:509.455.3713 | F: 509.455.3718
sstromberg at fennemorelaw.com
Washington, Idaho




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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Sara Longley
Sent: Wednesday, November 5, 2025 4:00 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>; WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: [WSBAPT] Transferring surviving spouse CP to a credit shelter trust?

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________________________________
Hello listmates,

I am working on a probate where the Decedent established a testamentary trust for benefit of their surviving spouse.  We are funding the trust with a non-pro rata distribution of assets so that a whole parcel of real property (i.e. the interest held by Decedent and the interest held by the surviving spouse) is placed into the testamentary trust.  Of course we are doing a PR Deed to transfer Decedent's interest.  What is the proper way to transfer the surviving spouse's community property interest?

I would never have thought of having the surviving spouse do a separate deed, except that I happened to read an unpublished Division II case earlier this year in which a credit shelter trust was found to contain only the Decedent's interest in a property, and not the surviving spouse's interest.  If this is of interest, here it is: https://www.courts.wa.gov/opinions/pdf/58577-4.25.pdf<https://www.courts.wa.gov/opinions/pdf/58577-4.25.pdf>

I am also interested to know how you would report the amount passing to the testamentary trust on the estate tax return - just the decedent's half, or the full value?  (And, if the full value, how do you state the math to explain it to the DOR?)

Many thanks in advance,
Sara


[cid:image001.png at 01DC4E70.ECCB91A0]

Sara D. Longley, Attorney

(Main) 360.378.4450 ext. 107

(Direct) 360.468.7230

Slongley at pnwtaxlaw.com<mailto:Slongley at pnwtaxlaw.com>

www.pnwtaxlaw.com<http://www.pnwtaxlaw.com/>



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