Can monetary gifts be given from a trust account?

[Anonymous]

I'm a trustee and beneficiary of a trust account and overseeing my parent's money. It will be better to give money to children and grandchildren now rather than have the IRS take 40% of some of it once the parent passes away.

Parent has a regular non-trust bank account and also a trust account. A lawyer I considered hiring said I had to be careful about "self-dealing" from the trust and that there are a lot of rules and laws around it.

My parent has enough to live on and will never need Medicaid, and all the money will go to us anyway.

If I gave a monetary gift to myself and the same amount to my sibling from the trust account, is this ok and legal to do?

I can't find the answer via Google and am hoping not to pay a lawyer $1,000 just to get an answer to this question.

If I can't find the answer, then I will keep the non-trust bank account and keep giving the gifts from that, but it seems crazy to have so many accounts.

[Anonymous]

Do you as the trustee have gifting powers? It’s usually covered in the trust documents.

[Anonymous]

Anonymous wrote:Do you as the trustee have gifting powers? It’s usually covered in the trust documents.

Geez, I am losing my mind with too many terrible life things going on. I bet it's in there. Thank you.

OP

[Anonymous]

You need to look at the Trust Agreement. You should also know whether or not the assets in this Trust are subject to the estate tax.

It sounds like the estate is more than $14m. You're a trustee, but you don't know what is in the Trust Agreement.

One thing I've learned from dealing with Trusts etc is that it's REALLY, REALLY unsupervised. There are no guardrails. In a lot of cases, family have to sue each other to enforce the rules. You can bop along doing things wrong for a long time and there is no corporate compliance entity to raise any flags for you.

Because of that, and the size of the estate, and your legal and ethical responsibility as the Trustee, you should really, really consider meeting with a lawyer to go over the Trust Agreement and understand the rules and your responsibilities. Get ahead of it. Make a plan for documenting distributions and reporting to beneficiaries. You'll be really glad you did all this when someone has hard questions, gets divorced, etc etc.

[Anonymous]

Anonymous wrote:You need to look at the Trust Agreement. You should also know whether or not the assets in this Trust are subject to the estate tax.

It sounds like the estate is more than $14m. You're a trustee, but you don't know what is in the Trust Agreement.

One thing I've learned from dealing with Trusts etc is that it's REALLY, REALLY unsupervised. There are no guardrails. In a lot of cases, family have to sue each other to enforce the rules. You can bop along doing things wrong for a long time and there is no corporate compliance entity to raise any flags for you.

Because of that, and the size of the estate, and your legal and ethical responsibility as the Trustee, you should really, really consider meeting with a lawyer to go over the Trust Agreement and understand the rules and your responsibilities. Get ahead of it. Make a plan for documenting distributions and reporting to beneficiaries. You'll be really glad you did all this when someone has hard questions, gets divorced, etc etc.

Thanks. I'll do that and have reached out to the lawyer who created the trust. I read the trust and think it says gifts are okay but I want someone to check the legalese because the phrasing is not clear to me, a non-lawyer.

The regular bank accounts have my name and sibling names on them (dumb, I know) but these accounts are prob the best ones from which to make the gifts until I can sort out the trust situation with the lawyer.

This all gives me a headache. I never knew a parent becoming incapacitated would require the number of hours I am putting into all of this.

[Anonymous]

Is the gift tax rate really lower than the inheritance tax rate?

[Anonymous]

If you are dealing with a trust that’s over $15M then you can easily pay for real legal advice. No one here can give you advice since we don’t know what the trust says, what state you’re in, etc.

[Anonymous]

No tax on gifts to charities.

[Anonymous]

Anonymous wrote:I'm a trustee and beneficiary of a trust account and overseeing my parent's money. It will be better to give money to children and grandchildren now rather than have the IRS take 40% of some of it once the parent passes away.

Parent has a regular non-trust bank account and also a trust account. A lawyer I considered hiring said I had to be careful about "self-dealing" from the trust and that there are a lot of rules and laws around it.

My parent has enough to live on and will never need Medicaid, and all the money will go to us anyway.

If I gave a monetary gift to myself and the same amount to my sibling from the trust account, is this ok and legal to do?

I can't find the answer via Google and am hoping not to pay a lawyer $1,000 just to get an answer to this question.

If I can't find the answer, then I will keep the non-trust bank account and keep giving the gifts from that, but it seems crazy to have so many accounts.

Are you saying they are over the $30m estate tax threshold in net worth?
What is their aggregate gifting to date figure? Also needs to be $30m per couple.

Do people need or want money right now? Or can they wait for last survivor death?

[Anonymous]

Anonymous wrote:

Anonymous wrote:You need to look at the Trust Agreement. You should also know whether or not the assets in this Trust are subject to the estate tax.

It sounds like the estate is more than $14m. You're a trustee, but you don't know what is in the Trust Agreement.

One thing I've learned from dealing with Trusts etc is that it's REALLY, REALLY unsupervised. There are no guardrails. In a lot of cases, family have to sue each other to enforce the rules. You can bop along doing things wrong for a long time and there is no corporate compliance entity to raise any flags for you.

Because of that, and the size of the estate, and your legal and ethical responsibility as the Trustee, you should really, really consider meeting with a lawyer to go over the Trust Agreement and understand the rules and your responsibilities. Get ahead of it. Make a plan for documenting distributions and reporting to beneficiaries. You'll be really glad you did all this when someone has hard questions, gets divorced, etc etc.

Thanks. I'll do that and have reached out to the lawyer who created the trust. I read the trust and think it says gifts are okay but I want someone to check the legalese because the phrasing is not clear to me, a non-lawyer.

The regular bank accounts have my name and sibling names on them (dumb, I know) but these accounts are prob the best ones from which to make the gifts until I can sort out the trust situation with the lawyer.

This all gives me a headache. I never knew a parent becoming incapacitated would require the number of hours I am putting into all of this.

Well, the good thing is this part comes with a lot of money. Having an elderly parent become incapacitated leads to a ton of unpaid admin time for the adult children even if the elder parent is on Medicaid. In many cases more! So count your blessings and get your ducks in a row. Once you have a good understanding of the trust agreement, your responsibilities, how to keep up with the taxes and how to document distributions it might be a low lift going forward.

[Anonymous]

Anonymous wrote:

Anonymous wrote:You need to look at the Trust Agreement. You should also know whether or not the assets in this Trust are subject to the estate tax.

It sounds like the estate is more than $14m. You're a trustee, but you don't know what is in the Trust Agreement.

One thing I've learned from dealing with Trusts etc is that it's REALLY, REALLY unsupervised. There are no guardrails. In a lot of cases, family have to sue each other to enforce the rules. You can bop along doing things wrong for a long time and there is no corporate compliance entity to raise any flags for you.

Because of that, and the size of the estate, and your legal and ethical responsibility as the Trustee, you should really, really consider meeting with a lawyer to go over the Trust Agreement and understand the rules and your responsibilities. Get ahead of it. Make a plan for documenting distributions and reporting to beneficiaries. You'll be really glad you did all this when someone has hard questions, gets divorced, etc etc.

Thanks. I'll do that and have reached out to the lawyer who created the trust. I read the trust and think it says gifts are okay but I want someone to check the legalese because the phrasing is not clear to me, a non-lawyer.

The regular bank accounts have my name and sibling names on them (dumb, I know) but these accounts are prob the best ones from which to make the gifts until I can sort out the trust situation with the lawyer.

This all gives me a headache. I never knew a parent becoming incapacitated would require the number of hours I am putting into all of this.

OP just ask a lawyer. That is what they are there for.