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Hi Mimi,</div>
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My only comments are that (1) this is only one of many examples of why lawyers (in their words and the words of an ALPS risk analyst a couple years back) “dabbling in estate planning” (sometimes as a relief mechanism from other practice areas) have multiple
unknown risks of their dabbling (harmful to both them and client), and (2) advice to residents of
<u>any</u> state holding <u>any</u> property in Washington requires analysis of their
<u>entire</u> estate (and thus, for example, I nearly universally require an estate planning questionnaire with financial disclosures, i.e., do it right or do it elsewhere).</div>
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On point (1), lest I sound merely protectionist, I send this shout out to a fantastic series this section produced a decade or so ago by which one could learn Washington trust and probate planning in 9 sessions or something of that nature. Phenomenal series,
presumably still available for purchase from WSBA.</div>
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On your second question, exceptions abound, but in general there is usually no problem with a simple one-page assignment of Individual A’s LLC interest to Individual A’s new living trust, ideal signed by the other LLC members to accept the assignment (or otherwise
as required by the operating agreement). I think you’d find trust practitioners have those signed routinely. </div>
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But, as a practical matter, what often matters most is “who runs the LLC and are they going to accept paperwork authorizing the LLC to deal with the trustee after death” instead of robotically demanding court issued Letters authorizing a PR — paperwork such
as a copy of the un-probated pour-over will together with a trust certificate with appropriate excerpts attached as exhibit A. </div>
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Best, Josh </div>
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Joshua D. McKarcher</div>
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McKarcher Law PLLC</div>
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537 6th Street</div>
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Clarkston, WA 99403</div>
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(509) 758-3345</div>
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(509) 758-3314 (fax)</div>
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josh@mckarcherlaw.com</div>
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<a href="http://www.mckarcherlaw.com">www.mckarcherlaw.com</a></div>
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<div id="divRplyFwdMsg" dir="ltr"><span style="font-family: Calibri, sans-serif;"><b>From:</b> wsbapt-bounces@lists.wsbarppt.com <wsbapt-bounces@lists.wsbarppt.com> on behalf of Mimi Wagner <mimi@sanjuanlaw.com><br>
<b>Sent:</b> Tuesday, October 21, 2025 4:41 PM<br>
<b>To:</b> wsbapt@lists.wsbarppt.com <wsbapt@lists.wsbarppt.com><br>
<b>Subject:</b> [WSBAPT] Nonresident estate taxes</span>
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<span style="font-size: 11pt;">Hello, Listmates,</span></p>
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<span style="font-size: 11pt;"> </span></p>
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<span style="font-size: 11pt;">A few weeks ago someone raised a question about WAC 458-57-125 and I did not notice any answer. If the nonresident decedent’s only asset in WA was a house in her own name valued at well less than the WA exclusion, I am surprised
to see that the entire non-WA estate of the nonresident decedent is pulled into WA for calculations, with the result that WA estate tax would nonetheless be due (in the hypothetical below). Can anyone comment on this? </span></p>
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<span style="font-size: 11pt;"><b> </b></span></p>
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<span style="font-size: 11pt;"><b>“</b>(b) <b>Example – Nonresident decedent.</b> A widow dies during 2013 leaving a gross estate of $6 million. The decedent was a Colorado resident at death and all of the decedent's property is located in that state, except
for a vacation home located in Washington valued at $650,000. The estate had $100,000 in expenses deductible for federal estate tax purposes. The applicable exclusion amount for 2013 is $2,000,000.</span></p>
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<span style="font-size: 11pt;">Under the facts of this example, the estate owes Washington estate tax on a Washington taxable estate of $3,900,000, computed as shown below:</span></p>
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<span style="font-size: 11pt;">Gross estate:</span></p>
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<span style="font-size: 11pt;">$6,000,000</span></p>
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<span style="font-size: 11pt;">Less allowable deductions:</span></p>
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<span style="font-size: 11pt;">($100,000)</span></p>
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<span style="font-size: 11pt;">Less applicable exclusion amount:</span></p>
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<span style="font-size: 11pt;">($2,000,000)</span></p>
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<span style="font-size: 11pt;">Washington taxable estate:</span></p>
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<span style="font-size: 11pt;">$3,900,000</span></p>
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<span style="font-size: 11pt;">The preapportionment Washington estate tax for this estate, using the table provided in WAC
</span><span style="font-size: 11pt; color: rgb(5, 99, 193);"><u><a href="http://app.leg.wa.gov/WAC/default.aspx?cite=458-57-115" style="color: rgb(5, 99, 193); margin-top: 0px; margin-bottom: 0px;">458-57-115</a></u></span><span style="font-size: 11pt;"> (3)(a),
equals $534,000, computed as follows: $390,000 + ($900,000 x 16%) = $534,000.</span></p>
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<span style="font-size: 11pt;">Because the decedent owned property located outside Washington, the tax due to Washington is calculated by multiplying the amount of preapportionment tax computed above by the fraction described in this subsection (2). Also, because
the decedent was not a Washington resident at death, the numerator of the fraction does not include the value of decedent's intangible personal property. The denominator of the fraction is the value of the decedent's gross estate. Using the facts in this example,
the tax owed to Washington equals $57,850, computed as follows: ($650,000/$6,000,000) x $534,000 = $57,850.”</span></p>
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<span style="font-size: 11pt;"> </span></p>
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<span style="font-size: 11pt;">A related query is:</span></p>
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<span style="font-size: 11pt;">Nonresidents want to put WA real estate in LLCs to convert them to intangible, non-WA situs property under the newer DOR guidance. Understandable. But the guidance is scarce. </span></p>
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<span style="font-size: 11pt;">Is anyone aware of any concerns about making the nonresident’s Trust a Member of the LLC (instead of a natural person)? I don’t know why this would be a problem, but there isn’t much guidance and the stakes are high. </span></p>
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<span style="font-size: 11pt;"> </span></p>
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<span style="font-size: 11pt;">Thank you,</span></p>
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<span style="font-size: 11pt;"> </span></p>
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<span style="font-family: Arial, sans-serif; font-size: 10pt; color: rgb(31, 73, 125);">Mimi M. Wagner</span></p>
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<span style="font-family: Arial, sans-serif; font-size: 10pt; color: rgb(31, 73, 125);">Wagner Law Offices P.C.</span></p>
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<span style="font-family: Arial, sans-serif; font-size: 10pt; color: rgb(31, 73, 125);">385 Court Street, Suite 4</span></p>
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<span style="font-family: Arial, sans-serif; font-size: 10pt; color: rgb(31, 73, 125);">P.O. Box 3019</span></p>
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<span style="font-family: Arial, sans-serif; font-size: 10pt; color: rgb(31, 73, 125);">Friday Harbor, WA 98250<br>
</span><span style="font-family: Arial, sans-serif; font-size: 10pt; color: blue;"><u><a href="mailto:mimi@sanjuanlaw.com" style="color: blue; margin-top: 0px; margin-bottom: 0px;">mimi@sanjuanlaw.com</a></u></span><span style="font-family: Arial, sans-serif; font-size: 10pt; color: rgb(31, 73, 125);"><br>
Phone (360) 378-6234<br>
Fax (360) 378-6244<br>
</span><span style="font-family: Arial, sans-serif; font-size: 10pt; color: blue;"><u><a href="http://www.sanjuanlaw.com/" style="color: blue; margin-top: 0px; margin-bottom: 0px;">www.sanjuanlaw.com</a></u></span></p>
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