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Financial Planning / Tax Strategies
|Subject: Re: Trust-to-trust problem||Date: 8/9/2001 11:16 AM|
|Author: edcosoft||Number: 53197 of 121216|
richielk wrote: My grandpa died and I'm supposed to receive some money as
beneficiary. This money was given to the parents for distribution to the
grandchildren. The estate was small so no tax implications. Now
somehow the money ended up in my parent's living (revocable) trust.
How can I get the money from my grandpa? I do have a supporting
letter from my grandpa's trust, I assume that if I'm given the exact
amount from my parents it would work with no gift tax implications -
the amt is slightly over 10k.
You may have misread the trust. What you are saying is that you are the direct beneficiary (skip person) and your parents are only the conduit to get the cash to you, and they have no right to keep the money for themselves. It is possible (as you imply) that your parents intercepted your money and kept it for themselves, and hence they violated their fiduciary duties. Although not trustees of your gradfather's trust, they were appointed *trustees* to distribute to you.
On the other hand, this could be proper handling because you are a minor, otherwise grandpa's trustee could have paid it to you directly instead of to your parents on your behalf. They are holding it for you until you reach majority. Grandpa's trust should clear this up if read properly.
Or, you may just be a *contingent beneficiary* and only get the money (what's left of it)after your parents die.
There are no tax consequences regarding their trust as it is a revocable grantor trust (same as though they put it in their own personal checking account). If they correctly follow instructions and give you the money it is an inheritance, not a gift, and hence not taxable in any transactions required to get the money to you (except interest on it).
Beyond those supositions, a full reading of the trust beneficiary clauses would be necessary to tell if you have a right to the money. ed
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