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</o:shapelayout></xml><![endif]--></head><body lang=EN-US link="#0563C1" vlink="#954F72"><div class=WordSection1><p class=MsoNormal><span style='color:#1F497D'>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.<o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:#1F497D'>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.<o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:#1F497D'>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.<o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:#1F497D'>At least I think this is how this all works.<o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><p class=MsoNormal><span style='color:#1F497D'> Steve <o:p></o:p></span></p><p class=MsoNormal><span style='color:#1F497D'><o:p> </o:p></span></p><div><div style='border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in'><p class=MsoNormal><b>From:</b> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com] <b>On Behalf Of </b>Timothy Lehr<br><b>Sent:</b> Thursday, January 16, 2020 4:53 PM<br><b>To:</b> wsbarp@lists.wsbarppt.com<br><b>Subject:</b> [WSBARP] Life Estates<o:p></o:p></p></div></div><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>All,<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>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. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>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.”<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>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. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>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. <o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>Thoughts on that or how I can improve granting life estates in the future?<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><b>Timothy C. Lehr<o:p></o:p></b></p><p class=MsoNormal>Attorney at Law<o:p></o:p></p><p class=MsoNormal>Stiles Law Inc., P.S.<o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal>p: 360.855.0131<o:p></o:p></p><p class=MsoNormal>e: <a href="mailto:timothy@stileslaw.com">timothy@stileslaw.com</a><o:p></o:p></p><p class=MsoNormal>w: <a href="http://www.stileslaw.com">www.stileslaw.com</a><o:p></o:p></p><p class=MsoNormal><o:p> </o:p></p><p class=MsoNormal><b>NOTICE</b>: 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. 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