[WSBARP] Life Estates

[Stephen A. Brandli]

I think the confusion is the point-in-time of the transfer.  Your scenario
has two points in time: the granting of the remainder interest for no
consideration, and the expiration of the life estate.

 

A life remainder interest is an interest in land the transfer of which is
taxable.  The only reason your deed is not taxable is that the transfer is
for no consideration.  So, it falls under the gift exclusion.

 

The transfer of the present interest to the remaindermen occurs upon the
death of the holder of the life estate.  This is covered by 202(6)(c), and
is not taxable.

 

At least I think this is how this all works.

 

                Steve 

 

From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Timothy Lehr
Sent: Thursday, January 16, 2020 4:53 PM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] Life Estates

 

All,

 

A member of my staff was recently questioned by our county treasurer's
office regarding the WAC exemption I put on a REETA for a life estate deed
and it brought up a broader question. I generally use Transfer on Death
Deeds more frequently than life estates, but every situation is unique. I am
now questioning my wording in the life estate document.  

 

My first question - Is this the best way to create a life estate? Mom and
Dad own property as h&w. They want to grant property to son but retain a
life estate. My quit claim deed sets out "Grantor, mom and dad, for and in
consideration for love and affection hereby conveys.to son, as his separate
property the followed described real estate." Then, below the legal
description "Reserving to the Grantors a Life Estate in said premises for
the Life of Grantors, Mom and Dad."

 

>From what I've read, son has a "remainder interest" in the property and it
does not "vest" until grantors have died or voluntarily left. Is that right?
My initial thought is the treasurer's confusion is that conveyance language
certainly looks life a gift, but for the language of Grantors reserving the
life estate. 

 

Next question - I used WAC 458-61A-202(6)(c) as exemption. The treasurer's
office would not accept and said my scenario calls for a "gift" exemption.
This again may be due to the conveyance language looking like a gift. But,
the example under the life estate WAC code exemption is literally the exact
situation which I listed above. 

 

Thoughts on that or how I can improve granting life estates in the future?

 

Timothy C. Lehr

Attorney at Law

Stiles Law Inc., P.S.

 

p:   360.855.0131

e:   timothy at stileslaw.com <mailto:timothy at stileslaw.com> 

w:  www.stileslaw.com <http://www.stileslaw.com> 

 

NOTICE: The information contained in this email is proprietary and/or
confidential and may be privileged. If you are not the intended recipient of
this communication, you are hereby notified to : (i) delete the email and
all copies; (ii) not disclose, distribute or use the email in any manner;
(iii) notify the sender immediately. Thank you. 

 

 

  _____  


 <https://www.avg.com/internet-security> 

This email has been checked for viruses by AVG antivirus software. 
www.avg.com <https://www.avg.com/internet-security>  





-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20200116/9073ba5b/attachment.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: ~WRD000.jpg
Type: image/jpeg
Size: 823 bytes
Desc: not available
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20200116/9073ba5b/WRD000.jpg>