[WSBARP] Estate Tax Avoidance

[Jim Doran]

I would attend.  I like the idea.  I got some very good responses to my
question.  However, some of the terms and devices are quite esoteric to the
general practitioner.

I would add to the CLE a section on the best ways to protect our assets
from the Medicaid spend down.

Now my soap box moment:  Of course, we in the field know that universal
health care is the answer.  I call it "death with dignity" rather than
hitting the elderly with a crisis on their deathbed. Elder abuse by the
State.  Talk about Orwellian Big Brother.  Why isn't this topic running
through the baby boom generation?
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 Tue, May 11, 2021 at 7:43 AM michael westseattleattorney.com <
michael at westseattleattorney.com> wrote:

> Hi: How about a CLE as this seems to come up a lot and with the increases
> in equity and government trend to get it and reduce the tax
> exemptions/deductions, we all could use a course on use of such things as
> the A-B-C trusts, and other tools in this area. But I mean a good focused
> CLE using examples , hypos, form provisions and why. Just an idea ! Mike
> Atkins
>
>
>
> ------------------------------
> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> on behalf of John J. Sullivan, Esq. <
> sullaw at comcast.net>
> *Sent:* Monday, May 10, 2021 9:41 PM
> *To:* 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] Estate Tax Avoidance
>
>
> Jim:
>
>
>
> Keep in mind that if you gift a capital asset while alive (real estate or
> securities) the recipient does NOT get a step up in basis at death. So
> gifting should ideally be of cash.
>
>
>
> John J. Sullivan
>
>
>
>
>
> *From:* wsbarp-bounces at lists.wsbarppt.com <
> wsbarp-bounces at lists.wsbarppt.com> *On Behalf Of *John J. Sullivan, Esq.
> *Sent:* Monday, May 10, 2021 9:38 PM
> *To:* 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
> *Subject:* Re: [WSBARP] Estate Tax Avoidance
>
>
>
> Jim:
>
>
>
> If they are both citizens each enjoys a lifetime exemption this year of
> $2.193M. So as long as you design their wills/RLT to not waste the
> exemption of the first decedent you are almost home. Also, WA has no gift
> tax, so the second decedent can gift near death.
>
>
>
> A TOD deed most certainly does not remove the real property from either
> estate and could make it difficult to implement the common “disclaimer
> trust” strategy for capturing the first decedent’s lifetime exemption. Same
> with the financial assets. The gross estate includes everything the
> decedent had control of at the moment of death.
>
>
>
> The $30,000 figure? I’m guessing you mean the $15,000 annual exclusion for
> each of them to any one recipient from federal gift taxes. So they can gift
> up to $30,000.00 to any one recipient together without filing a gift tax
> return. But again, there is no WA gift tax.
>
> All they need is a standard plain vanilla disclaimer trust design that
> QTIPs the credit shelter trust for federal purposes to secure a second step
> up in basis. Every married couple plan should be able to shelter up to
> $4,386,000 without doing anything fancy or aggressive. They’re only
> $214,000.00 over the combined threshold. Consider having the survivor make
> gifts as near as death as necessary to assure not running out of funds.
>
>
>
> I’m coming to this late, so if anyone has already set this out, I
> apologize for repeating.
>
>
>
> John J. Sullivan
>
>
>
> *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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