The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: Taxes for Family Trust Date:  5/14/2017  1:51 PM
Author:  inparadise Number:  125920 of 132878

Thanks Bill.

Often, the terminology used is "health, education, maintenance, and support," or HEMS in legal shorthand.

Yes, that is the laundry list, but I did not reference "education" when talking about Eldest as he has his degree.

In many cases it is a LIMIT on the distributable AMOUNT, but it doesn't require a proof of NEED to get it.

Proof of need is specified in this trust, as is the stated intent that this trust will preserve capital, grow, and go on "in perpetuity. " The beneficiary is one co-trustee with a "corporate fiduciary or CPA" being the other. Obviously it is not the beneficiary who determines need, since they are the interested party. So far I have not found verbiage on what constitutes need. Are we expected to tap our retirement funds to pay for Youngest's college before we meet the need requirement? Really no idea. Maybe we'll just try it and see.

Will suggest to DH that they have a sit down with the lawyer to have him outline how this trust should work. How do they get funds from the account, (deemed possible in one section and subject to need in others.) Sometimes you don't even know the questions to ask so thanks. In the very least a better understanding will have to be arrived at before the CPA would have a clue what to do. I've read the full packet they are to receive and it too is unclear on how to do things like determine need and inconsistent on whether need must be shown to receive income.

It's a start.

Copyright 1996-2021 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us