Estate Finance Family Tax Plan Question
1. On January 2, 2000, Larry creates a trust with Larry's wife Cheryl as trustee. Cheryl as trustee may distribute principal and income to Susie and Leon for their welfare. Upon Larry's death, the remainder is distributed to Susie and Leon equally. Does Cheryl's power to distribute principal and income cause the trust to be grantor as to Larry under § 671. Why or why not?
Answer is Given below:
A capacity to appropriate to salary bolster a recipient to whom the granter is legitimately commit to help not cause trust to be treated as granter trust, but to the degree that the pay is in reality utilized for such purpose.This special case applies regardless of whether the force is held by the granter or the granters spouse(IRC 677 (b) ).
A granter won't be treated as proprietor of a trust dependent on capacity to decide the valuable pleasure in the trust corpus or salary if the corpus or pay is irreversibly payable for beneficent reason as Quality in IRC 170 (c) (IRC 674 (b) (4) ).
A granter isn't treated as the proprietor of trust just in light of the fact that trust income,at the caution of the grantor (as trustee) or someone else, might be utilised for the help of a recipient ( other than the grantor life partner) whom the grantor is lawfully committed to help the grantor is possibly saddled on the trust salary if the pay is really conveyed for a such reason (IRC 674).
In the given case Larry as a trustee may disperse salary and guideline to susie and leon to accommodate their wellbeing, education,maintenance,and support and upon on larry's demise , the update is circulated to susie and leon similarly. Consequently taking into account above reference from segment 674 and 677 the trust won't be a grantor trust hope to the degree that the salary is in certainty Utilized for such reason.
Estate Finance Family Tax Plan Question 1. On January 2, 2000, Larry creates a trust with...
3. On January 2, 2000, Larry creates a trust with himself as trustee. Larry as trustee may distribute income and principal to Susie and Leon to provide for their health, education, maintenance and support. Upon Larry’s death, the remainder is distributed to Susie and Leon equally. Does Larry’s power to distribute principal and income cause the trust to be grantor as to Larry under § 671? Why or why not?
Estate Finance Family Tax Plan Question 1. On January 2, 2000, Larry creates a trust with Tenleytown Trust Company as trustee. The trustee must distribute income to Susie. On January 2, 2005, the trust will terminate and the property will be distributed back to Larry. Assume that the trust is a grantor trust as to Larry under § 671. In 2001, the trust had the following receipts: $50,000 of dividends from publicly traded stock. $10,000 of interest from corporate bonds....
Estate Finance Family Tax Plan Question Father creates a trust that provides income to Son for Son's life. Upon Father's death, the remainder of the trust will continue in trust for Son until he reaches age 35, at which point the remainder will be distributed to him. If Son is age 35 or older at father's death, then the remainder of the trust is distributed to him outright. If Son dies at any point during the administration of the trust,...
Donald established an irrevocable trust on May 10, 2013. The trust named his wife, Melinda, as trustee and named his daughter, Daisy, as backup trustee. The trust instrument contained the following key provisions: This trust is irrevocable. To the extent allowed by law, the assets in this trust shall not be subject to the beneficiaries’ liabilities or creditors and shall not be subject to assignment or anticipation by any beneficiary. During the lifetime of the grantor, the trustee may, in...