No. of Recommendations: 1
What are the tax implications if I withdraw all the prinicpal from Trust #1 and use it to fund Trust #2?

You need to provide more information to get a good answer. Some useful info:
-- Are you the *only* beneficiary? If not, who else is entitled to trust assets after your death?
-- Are there provisions in the trust saying what happens if no named successor trustee is willing or able to serve?

It's possible there are benefits to keeping Trust #1 rather than killing it only to create Trust #2. But they depend on what your mother's intent was in creating Trust #1 and whether there were any estate tax or generation skipping tax planning issues that your mother hoped to solve with the trust.

good luck,
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