First and foremost your mother can give you as many gifts as she wants an the only issue is how the gift is taxed. So what he is telling you is in fact not true.
"If you give someone money or property during your lifetime, you may be subject to federal gift tax. IRS Publication 950, Introduction to Estate and Gift Taxes, gives you a general understanding of when these taxes apply and when they do not. It explains how much money or property you can give away during your lifetime or leave to your heirs at your death before any tax will be owed.
No tax owed. Most gifts are not subject to the gift tax, and most estates are not subject to the estate tax. For example, there is usually no tax if you make a gift to your spouse at your death. If you make a gift to someone else, the gift tax does not apply to the first $11,000 that you give that person each year.
No return needed. Generally, you do not need to file a gift tax return unless you give someone other than your spouse money or property worth more than $11,000 during a year.
No tax on the person receiving your gift. The person who receives your gift or estate will not have to pay any gift tax or estate tax because of it. Also, that person will not have to pay income tax on the value of the gift or inheritance received.
No income tax deduction. Making a gift or leaving your estate to your heirs does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions).
What IRS Publication 950 contains. If you are not sure whether the gift tax or the estate tax applies to your situation, see Publication 950. It explains in general terms:
- When tax is not owed because of the unified credit,
- When the gift tax does and does not apply,
- When the estate tax does and does not apply, and
- When to file a return for the gift tax or the estate tax.
California does not have a gift tax or an inheritance tax. However, California does still impose a death tax equal to the federal credit for state death taxes. This is commonly called the "pick-up tax".
In addition, the California Inheritance Tax Law provides for a generation-skipping transfer tax equal to the allowable credit amount under the federal Generation-Skipping Transfer Tax provisions. For more information, see Tax Information on the California State Controller's website.
Offers in Compromise" http://www.taxes.ca.gov/income_tax/specialind.shtml
Further, if your mother left you other assets in the trust they are yours and no one can change the terms of the trust other than your mother. The trust document prepared for your mother has her name the Trustee. How did he become trustee?