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If i am the trustee of my childrens irrevocable trust, am i…

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If i am the...

If i am the trustee of my childrens irrevocable trust, am i allowed to receive a gift from their trust?

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My children have an irrevocable trust in which i am the trustee. i want to know if i'm allowed to receive a gift (up to 14k) from their trusts

Submitted: 4 months ago.Category: Tax
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Answered in 9 minutes by:
11/29/2017
Tax Professional: Lev, Tax Advisor replied 4 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,739
Experience: Taxes, Immigration, Labor Relations
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As a trustee - in general any gifts made from the trust to you - will be considered as compensation for being a trustee - that will be based on relations between you and the trust.

Therefore - it will be taxable income for you.

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Tax Professional: Lev, Tax Advisor replied 4 months ago

In additional - unreasonable compensation - that might be considered as too high compared to services you provide to the trust as a trustee - may be treated as violation of your trustee fiduciary duty...

Trustees have certain legal duties in relation to the management of the trust. The most important duty is the duty of loyalty.

Since trustees are the legal owners of the trust property, the duty of loyalty prevents the trustee from taking advantage of the legal ownership to use the trust property for his own benefit.

Correspondingly - that may result the removing you from being a trustee.

So - while gifts are not directly prohibited - we need to act very carefully this matter.

Let me know if any clarification needed,

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