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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">I realize I could have surviving spouse disclaim interest in residence and then do PR Deed putting ½ of the residence in Bypass Trust. PR could then sell that
interest to surviving spouse, get back a promissory note and also prepare and record a DOT to secure the interest. But, I’m worried about excise taxes. Is there a clear exemption/qualified transaction in the WAC?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Is that any risk, and if so what would it be to instead:<o:p></o:p></span></p>
<p class="MsoListParagraph" style="text-indent:-.25in;mso-list:l0 level1 lfo1"><![if !supportLists]><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><span style="mso-list:Ignore">1)<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Have surviving spouse sign a qualified disclaimer (as to decedent’s ½ community property interest in house) – file disclaimer in probate file<o:p></o:p></span></p>
<p class="MsoListParagraph" style="text-indent:-.25in;mso-list:l0 level1 lfo1"><![if !supportLists]><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><span style="mso-list:Ignore">2)<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Then sell that interest to surviving spouse and get the Promissory note and Deed of Trust as discussed above owned in the bypass trust<o:p></o:p></span></p>
<p class="MsoListParagraph" style="text-indent:-.25in;mso-list:l0 level1 lfo1"><![if !supportLists]><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><span style="mso-list:Ignore">3)<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Have PR sign a deed placing the decedent’s interest (i.e. the full probate interest) to surviving spouse.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Wouldn’t that dot the “I”s and cross the “t”s allowing funding of the bypass trust while avoiding any real estate excise taxes?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">And, the surviving spouse would still have the full Section 125 deduction (avoidance of capital gain) if home later sold for less than $250K above the FMV
at death of the first spouse?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D">Is there any risk associated with this plan/order of events?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal" style="background:white"><b><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:black">Stephen M. Waltar, PS</span></b><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><b><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">Estate Planning Law</span></b><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
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<p class="MsoNormal" style="background:white"><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">Bellevue, WA 98004</span><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
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<p class="MsoNormal" style="background:white"><b><i><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">If we should be helping someone you care about,
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<p class="MsoNormal" style="background:white"><i><u><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">Circular 230 Warning</span></u></i><i><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">: This communication is
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<p class="MsoNormal"><b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif"">From:</span></b><span style="font-size:10.0pt;font-family:"Tahoma","sans-serif""> wsbapt-bounces@lists.wsbarppt.com [mailto:wsbapt-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Steve Waltar<br>
<b>Sent:</b> Wednesday, April 29, 2015 12:25 PM<br>
<b>To:</b> WSBA Probate & Trust Listserv<br>
<b>Subject:</b> [WSBAPT] Promissory Note to fund Bypass Trust<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif"">First, who can give me an overview of using a promissory note instead of placing residence into a bypass trust?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif"">Second, can you put a promissory note into a bypass trust – at all when it is a disclaimer trust?
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:#1F497D"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal" style="background:white"><b><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:black">Stephen M. Waltar, PS</span></b><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><b><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">Estate Planning Law</span></b><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">1750 - 112th Avenue NE, Suite C245</span><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">Bellevue, WA 98004</span><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">(425) 455-6788</span><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-size:11.0pt;font-family:"Calibri","sans-serif";color:black"><a href="http://www.waltar.com/" target="_blank" title="blocked::http://www.waltar.com/"><span style="font-size:10.0pt">www.waltar.com</span></a></span><span style="font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
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<p class="MsoNormal" style="background:white"><b><i><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">If we should be helping someone you care about,
</span></i></b><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><b><i><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black">please don't keep us a secret!</span></i></b><span style="font-size:10.0pt;font-family:"Calibri","sans-serif";color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="background:white"><span style="font-family:"Calibri","sans-serif";color:black"> <o:p></o:p></span></p>
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