funding a trust

My Dad died late last year. He had estbalished a marital deduction trust agreement to protect his $675k exemption. The trust agreement says everything beyond the $675k goes to my Mom "free of trust", but he has the trust as beneficiary for his life insurance and profit sharing plan, which together exceed the $675k by a significant amount. Once these are paid to the trust, how are they transferred to my Mom so as not to create a tax liability ?

I assume that this is all done within a living trust. The marital deduction trust does not get established or funded until after death. The assets payable to the trust can be used to fund this trust. A great deal depends on the details of the trust terms (e.g. the funding formula). Filing the estate tax return and funding these trusts requires the assistance of an attorney. I recommend that you (or the trustee) retain an attorney to help with estate administration. Good luck.

Funding the trust wasn't really the issue. The question is how does the excess amount (over $675k) get moved out of the trust without creating a tax liability ? Thanks.

It should be done automatically by a formula in the living trust. Without looking at the document it is impossible to say exactly. Again, seek professional help with this, and good luck.