Have a Tax Question? Ask a Tax Expert
so what you are telling me is. if we do nothing with the trust and let it play out when our parent pass we the beneficsere will be stuck with this tax. on any thing we recieve over the 2 million exclusion. of there estate. can my parents have not gifted anything up till now. how do they change there trust?this is all new to us.
it is a revocable trust and all my parent assets are in it. we set it up this way because we did not worry about gifting or transfering it into our names because
we could not protect it because our mom is already in a nursing home. my dad with the cash rnt and long term care can support his and her needs. that why he want to just pass it on through the trust. so are we okay if we let it play out
You originally mentioned irrevocable trust - may be that is a typo. With revocable trust - which is basically ignored upon the settler's death - transfer into the trust makes no difference.The trust will become irrevocable after the settler's death - and you will be able to continue maintain the trust and use the farm owned by the trust. Generally - family farms are excluded from Minnesota estate tax - there a limit of $5 million per person. So far - nothing to worry - if you do not want to transfer thr ownership into your name.
Only if you plan immediately transfer the title to yourself - you need to do that before June 30 - otherwise I think - just let it go to the trust - and you will keep the trust after your parents will pass away.
Sorry - I have to step out - please keep posting - I will be back and will address all your concerns.
sorry for the mistake. thank you for help now i think i understand we will just leave it as setup now, because my parents wishes were to pass it down in the trust. he does not want to gift it to our names. so it should not affect us correct
did you see my post from 11.01 that should be my last thanks
i will check for your response in an hour thanks
Sorry for the delay... If your parents plan to pass the property to you as part of their estate - gift tax would not be an issue.In this case - a property will be subject of estate taxes. Generally each person is able to pass tax free to beneficiaries $1,000,000. However additional $4,000,000 exemption is allowable for estates that include a small business or farm. So - each of your parents will be able to pass $5,000,000 before estate tax liability woudl be in effect.You may take a look at this new law here - see page 28 - http://www.house.leg.state.mn.us/hrd/bs/88/HF0677.pdfSee on page 30 - Qualified farm property definition.Minnesota Department of Revenue will issue detailed publication - but so far nothing is available yet.
thank you for all your help. very satisfied