[WSBARP] Mechanics of Funding Special Needs Trust

[Margaret Delp]

Hi All:  

 

Disabled Wife transfers her share in real property via Quit Claim Deed to
Husband in order to continue to qualify for public benefits.  Then, sadly,
healthy husband dies intestate. Only asset is the real property. Under
intestacy laws, ½ of separate property goes to Wife and ½ goes to the adult
kids.  Luckily, the kids want to give their share of the estate in trust to
a third-party special needs trust for the benefit of Wife (Trust 1).  The
Wife’s share of the estate will be going to a self-settled special needs
trust (aka d4A Trust)(Trust 2).   We will be signing a TEDRA Agreement
explaining.

 

QUESTION – Can the personal representative transfer the real property to the
two trusts in a single step (one deed). Or, is it necessary or preferable to
do this in two steps – first have the personal rep. transfer the property to
the kids and then have the kids execute a second deed conveying their share
to the trustee of the third-party special needs trust?   Each of the kids
will also need to file a gift tax return, correct?  Any way to avoid this?

 

Thanks,
Margaret

 

 

 

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Law Office of Margaret Delp

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Langley, WA 98260

Telephone: 360-579-4530

 

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