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<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Times New Roman",serif">If the property is already in the trust, perhaps all you need is an amendment to the trust adding Husband as a co-trustee and declaring all of the property (or just the
house) to be community property. But I will let others opine on that subject, because I am not sure of that answer.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Times New Roman",serif">One more point I am not sure of: Section 1014(e) denies a stepped-up basis for appreciated property acquired from a decedent who had acquired the property from the beneficiary
within the one-year period prior to the decedent’s death. §1014(e). As a result, gifting low-basis assets to a terminally ill relative, only to receive it back again when the relative dies, does not increase the basis. It is an open question whether the
denial of the basis step-up applies not only to the beneficiary, but also to a trust for the benefit of the beneficiary. Thus if Wife conveys appreciated property to Husband, and Husband dies within one year and then bequeaths the property to a credit shelter
trust for the benefit of Wife (or to a QTIP trust for the benefit of Wife), whether the trust receives a stepped-up basis on Husband’s death is uncertain. Siegel,
<i>I.R.C. Section 1014(e) and Gifted Property Reconveyed in Trust</i>, 27 Akron Tax J. 33 (2012). Regulations under §1014(e) have not yet been promulgated, but the IRS has taken the position that §1014(e) does deny a basis step-up for appreciated property
left in trust for the benefit of the spouse who conveyed the prope<span style="color:black">rty to the decedent within one year prior to death. PLRs 200101021 and 200210051. See also PLRs 9026036 and 9321050. For further uncertainty, you are adding the
complexity of a revocable trust as the conveying vehicle. And you might even be adding the complexity of a joint revocable trust.<o:p></o:p></span></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Times New Roman",serif;color:black">All of this makes my head hurt. Perhaps someone else on this listserv knows the real answer. If not, go find someone who does.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Times New Roman",serif;color:black">Phil Jones</span><span style="font-size:16.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">Philip N. Jones<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">Duffy Kekel LLP<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">900 S.W. Fifth Ave. Suite 2500<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">Portland, OR 97204<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><a href="mailto:pjones@duffykekel.com"><span style="color:#0563C1">pjones@duffykekel.com</span></a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">(503) 226-1371 – office<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">(503) 853-1482 – cell<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif">(503) 226-3574 - fax<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>Kira Rubel<br>
<b>Sent:</b> Monday, April 24, 2023 3:43 PM<br>
<b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com>; WSBA Probate & Trust Listserv <wsbapt@lists.wsbarppt.com><br>
<b>Subject:</b> [WSBAPT] Another Deed quandray<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">To my deed/title experts: help. <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">I have a Client who owns a home in Pierce County in her and her deceased husband's (Husband #1) living trust. She is now (after an appropriate amount of time) remarried to Husband #2. Husband #2 is terminally ill. After obtaining CPA approval,
she would like to take her home and make it Community Property with Husband #2 to get a step up in tax basis when he passes away. She intends to keep it in her existing living trust and add him as co-Trustee as well. <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">My question is - how many deeds to accomplish this? <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Presently the house is held as: Client and Husband #1, Co-Trustees of the Smith Family Trust. <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">Thoughts? <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><i><span style="font-size:13.5pt;font-family:"Cambria",serif">Kira M. Rubel, Esq.</span></i><o:p></o:p></p>
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<p><i><span style="font-size:10.0pt;font-family:"Cambria",serif">*Licensed in CA and WA</span></i><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p>
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