[WSBARP] FW: Estate Tax Avoidance

Mon May 10 17:51:40 PDT 2021

Ok.  I am clear on the need to totally alienate oneself from the asset by a
Trust, like the QTIP, or Deed inter-vivos, which is not a good idea for
capital gains issues.  I think I am either over my head or at a point where
I got a lot to learn.

Thanks,

Jim Doran
James R. Doran
Attorney at Law
100 E. Pine Street -  Suite 205
Bellingham, WA 98225
(360)393-9506
jim at doranlegal.com
www.doranlegal.com

On Mon, May 10, 2021 at 5:47 PM Joshua McKarcher <josh at mckarcherlaw.com>
wrote:

> To my understanding, a Transfer on Death Deed does *not* remove any of
> the grantor’s rights during lifetime or reduce the value of the property in
> the grantor’s hands. It is fully revocable to the moment of death (at least
> in theory, subject to capacity, etc., but that also has nothing to do with
> estate tax valuation).
>
>
>
> The grantor does not give up anything s/he must “take back” to fully own
> it again during lifetime. It is not like reserving a life estate or
> something like that, which indeed may have different valuation at death for
> estate tax purposes.
>
>
>
> I would be very cautious concluding that a property subject to a TODD can
> be valued at any amount less than fair market value at date of death, just
> as it would be if it passed through probate. (Of course, if there are
> multiple tenants or such fun things, then valuation is the deceased
> person’s interest, etc. But in general, I am not aware of any basis to
> value a property passed by TODD at less than FMV at date of death.)
>
>
>
> Best regards, Josh
>
>
>
> Joshua D. McKarcher
>
> McKarcher Law PLLC
>
> 537 6th Street
>
> Clarkston, WA 99403
>
> (509) 758-3345
>
> (509) 758-3314 (fax)
>
> josh at mckarcherlaw.com
>
> www.mckarcherlaw.com
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *Roger Hawkes
> *Sent:* Monday, May 10, 2021 5:12 PM
> *To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] FW: Estate Tax Avoidance
>
>
>
> If done correctly the todd removes some right, since further
> action/happenings is needed to fully own it again.  So is there a
> difference in valuation?
>
>
>
> Roger Hawkes, WSBA #
> 5173
>
> *Shoreline* Office: 19944 Ballinger Way NE
>
>                                 Shoreline, WA 98155
>
> *Sultan* Office:        423 Main
>
>                                  Sultan, WA 98294
>
>
>
> Phone: 206 367 5000; fax: 206 367 4005
>
> Email: roger at law-hawks.com
>
> Web site: www.hawkeslawfirm.com
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *Rani K. Sampson
> *Sent:* Monday, May 10, 2021 4:10 PM
> *To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Subject:* [WSBARP] FW: Estate Tax Avoidance
>
>
>
> Hi, Jim,
>
> That TODD is revocable, which means it’s not out of their estate.  All I
> remember from my tax law class is IRS code 2036:  Everything that you own
> or control at death is part of your estate and taxable.
>
>
>
> Also – if you give away the house but still live there, the IRS will look
> at that with a squinty eye:
>
>
> https://www.sgrlaw.com/think-you-can-give-away-ownership-in-a-home-and-continue-to-live-there-without-the-value-of-the-home-being-included-in-your-estate-think-again/
>
>
>
> *Rani K. Sampson*
>
> Overcast Law Offices | Attorney
>
> 23 S Wenatchee Ave #320, Wenatchee WA 98801 | (509) 663-5588 x 6
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *Jim Doran
> *Sent:* Monday, May 10, 2021 12:45 PM
> *To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
> *Subject:* [WSBARP] Estate Tax Avoidance
>
>
>
> Death and Taxes:
>
>
>
> Married clients are getting old.  They want to know what they can do to
> shelter their assets from inheritance tax here in Washington.  They have a
> home worth $600,000.00 and financial assets of roughly $4,000,000.00.  When
> we do the calculations the inheritance tax would be $301,050.00 upon the
> death of the second spouse if they do not dispose of any of the assets.  We
> need to shelter $2,407,000.00.
>
>
>
> I have two questions off the bat.  All this talk of Transfer on Death
> Deeds makes me wonder if they do a TODD will that keep the real property
> out of the "estate" for purposes of the estate tax?  The second question is
> if they make specific beneficiaries for $2,407,000.00 worth of their
> financial investments, will that keep that amount out of the estate tax
> calculation?
>
>
>
> And I do know that as a married couple they can gift $30,000 per year per
> person, but they don't want to do that for personal reasons.
>
>
>
> I am sure there are other ways to do this.  Any ideas that are not too
> complicated would be appreciated.
>
>
>
> I appreciate it.
>
>
>
> Jim Doran
>
>
>
> James R. Doran
>
> Attorney at Law
>
> 100 E. Pine Street -  Suite 205
>
> Bellingham, WA 98225
> (360)393-9506
>
> jim at doranlegal.com
>
> www.doranlegal.com
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