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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41221
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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my wife has a trust fund set up by her late grandfather.

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my wife has a trust fund set up by her late grandfather. It is to be dissolved when she turns 50 years old. what do we need to know before closing out this type of trust and how may taxes come into play for her/us. we are a married couple.

thanks.
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my replies.

Can you please tell me what kind of trust this is? Irrevocable, credit-shelter, etc? Or not sure?

Also, show is the trustee on the trust - her or someone else?

This is not an answer, but an Information Request. I need this information to answer your question. Please reply, so I can answer your question. Thank you in advance.
Customer: replied 3 years ago.


it is an irrevocable trust in her name and has been run by Bank of America since it was created

Thank you, Bob.

I am going to opt out of your question and open this up for other experts.

Your JustAnswer Account has not been charged for this conversation and your question is back in the queue. You do not have to stay online for the question to be active. Should an expert pick it up, you should be alerted via email and/or SMS (text message) unless you actively disable these features.

There is no need for you to reply at this time as this will "lock" your question back to me, thus inadvertently delaying other experts' access to it.

My apologies for any inconvenience and good luck...
Thank you for your question. A different contributor here.

Does the trust designate where the proceeds of the trust are slated to go, or is that up to the trustee? I ask to best figure out how the potential tax implications may affect the beneficiaries. How large is the trust in terms of assets? Other than the trust being dissolved, are there any conditions as to where the funds are permitted to go?
Customer: replied 3 years ago.


Hi Dimitry,


 


the trust simply states it will be dissolved when my wife reaches the age of 50 years old and all funds distributed to her. Before it is dissolves we are trying to determine if there are any tax issues we should be concerned with that might affect how we receive or handle the money.


does it matter what type of investments were involved? the trust is appoximately $75-100,000.

Thank you for your follow-up.

The biggest issue is for anything and everything that your wife directly receives, she will pay tax based on her capital gains. So if you cannot somehow intercept the funds and shunt them to a new entity, such as potentially a new trust, the $100,000 or so she will receive will all come in at current tax rate and will become fully taxable to her. It would not matter what investments are involved, what would matter if she receives the funds directly--if that happens she likewise receives not just the money but the tax obligation also.

Good luck.

Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41221
Experience: Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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