[WSBARP] Washington State Estate Tax

Tue Nov 26 09:51:13 PST 2019

Article 2. Estate to Husband; Possible Trust for Husband.

2.1 Estate to Husband. If my husband survives me then I give him the residue of my estate.

2.2 Possible Disclaimer Trust. Provided, however, that if my husband disclaims all or any portion of my estate to be distributed to him, such disclaimed property shall be distributed to the Disclaimer Credit Trust to be held and administered as provided below in the section titled “Terms of Disclaimer Credit Trust.”

Article 10. Terms of Disclaimer Credit Trust.

If my husband elects to disclaim his right to receive outright ownership of certain assets of my estate including my half interest in any community property assets, then such property disclaimed by him shall be held in this Disclaimer Credit Trust and shall be administered as follows:

10.1   Husband as Trustee; Alternate Trustee.

10.2 Succession

10.3 Income to Husband

10.4 Principal for Support.  If the net income is not adequate for my husband’s maintenance, education, support , and health, then the Trustee is authorized to distribute such portions of the principal of the trust estate as the Trustee in his sole discretion determines reasonable for such purposes.  (So the surviving spouse is trustee and decides whether to invade the principal. The survivor won’t want to invade if that puts them over the exemption equivalent.)

10.5 Distribution Upon Death of Husband.

10.6 Possible Washington Marital Trust. I direct that the trustee may select certain assets to be further designated as also being held in a Washington State Marital Trust. The Trustee may reform this Trust as necessary for those selected assets to qualify for the marital deduction from the Washington estate tax and to elect such deduction to reduce or eliminate the Washington estate tax, in the reasonable discretion of the Trustee.

10.7 Trustee Powers and Duties.

The reason for using this approach is to maintain the flexibility for the surviving spouse to decide at the time for the first spouse to die whether to take the deceased spouse’s estate free of trust. Common for assets and exemptions to be very different from when the will was drafted. So this goes in both spouses wills, but the trust won’t be established until if and when it is needed. Disclaimers require the surviving spouse exercise no control over the funds and the declaimer be formalized no later than 9 months of first to die. There is a disclaimer statute.

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Jim Doran
Sent: Tuesday, November 26, 2019 8:46 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Washington State Estate Tax

Does the Disclaimer Credit Trust get set up now or at the time of the first spouse's death?  

For instance, do they both specify in their Wills that a Credit Trust is to be used upon their death if that would be of benefit?

Or do we set up a Credit Trust now?

Jim Doran

James R. Doran

Attorney at Law

100 E. Pine Street -  Suite 205

Bellingham, WA 98225
(360)393-9506

jim at doranlegal.com <mailto:jim at doranlegal.com> 

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

On Mon, Nov 25, 2019 at 4:16 PM Rick Hoss <rhoss at hctc.com <mailto:rhoss at hctc.com> > wrote:

A Disclaimer Credit Trust works for your situation. Upon the first to die, the surviving spouse elects whether to disclaim a portion of the first to die’s estate to the Credit Trust. Often amounts over $2,193,000, but much to consider at that time. Disclaimed funds go into the Credit Trust. With no disclaimer there is no Credit Trust and the survivor receives those funds outright. The Credit Trust appoints the surviving spouse as trustee, and distributes the funds upon the survivor’s death to the first to die’s heirs. This is a simple, flexible way to take advantage of the first to die’s unified credit – so their collective estates receive two $2,193,000 exemptions. If you leave all to the surviving spouse they will lose the first to die’s credit exemption.

From: wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com>  <wsbarp-bounces at lists.wsbarppt.com <mailto:wsbarp-bounces at lists.wsbarppt.com> > On Behalf Of Jim Doran
Sent: Monday, November 25, 2019 1:16 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com <mailto:wsbarp at lists.wsbarppt.com> >
Subject: [WSBARP] Washington State Estate Tax

Dear Estate Attorneys:

Generally I do not have clients with an estate over $2.193 million.  Now I do.

I am preparing Wills for both spouses.  They want me to do something in the Will so that at the time of death of the second spouse there is a method that will give the Personal Representative the opportunity to put funds into a trust of some sort in order to avoid the estate tax.  

Does this transfer to a trust have to be done before the death of the second spouse?  (I think so.)  Or can it be done like a "Testamentary Trust, to occur upon the death.  

What is the simplest way to do this?  (I am willing to learn.....)

They do not want to gift very much to their not so responsible children.  

Jim Doran

James R. Doran

Attorney at Law

100 E. Pine Street -  Suite 205

Bellingham, WA 98225
(360)393-9506

jim at doranlegal.com <mailto:jim at doranlegal.com> 

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

***Disclaimer: Please note that RPPT listserv participation is not restricted to practicing attorneys and may include non-practicing attorneys, law students, professionals working in related fields, and others.***

_______________________________________________
WSBARP mailing list
WSBARP at lists.wsbarppt.com <mailto:WSBARP at lists.wsbarppt.com> 
http://mailman.fsr.com/mailman/listinfo/wsbarp

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20191126/b41648c5/attachment.html>