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Financial Planning / Tax Strategies
|Subject: trust account confusion||Date: 2/16/2003 10:31 AM|
|Author: yFool||Number: 63870 of 121219|
i was hoping for a reality check
on a really confusing mess.
grandpa passed away.
money went into a testamentary trust.
lawyers set up a second trust
so that money goes from the testamentary trust
to the grand children and then into the second trust.
my understanding of the reason for this are twofold:
1) generation skipping trust has some sort of tax advantage
2) it's sort of a spendthrift account as the children (my parents) are less than...errr..."organized" about their finances than the grand children.
the second trust is for the benefit of my parents, and then secondarily the grand children (me).
thanks for reading this far
now to the questions
if the second trust pays money to me, is it taxable?
if the trust "reimburses me" for paying for goods or services for my parents, do i incur a tax liability?
if the trust reimburses me for paying my parents property tax, is a tax advantage lost? if not, who gets it, me or the trust?
PS to date, the assets in the trusts have not appreciated significantly,
i think there's just been a small amount of interest income
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