estate taxes

[lee sloan]

Texas,
basically have a two part question. My step mother and I are the beneficiaries of a trust that was set up by my father, the distributions of the trust are made from stock dividends each month. My two part question is , the executor of the estate collects a trustee fee each month deducted from the gross total of the distribution equal to approx. 13%, is a trustee’s fee allowed to be charged at that % and for distribution from a brokerage firm? The second part is all income from that trust has been reported to the IRS and claimed on my taxes , from the last distribution there has also been included a deduction of a large amount (per the Trustee) to cover U.S Treasury Taxes for 2008, and U.S Treasury estimated tax 1st qtr. 2009, my question on this is , if I am already paying taxes on dividends received plus qtr. Estimates, are these other Taxes from the Account Value? And should the taxes be paid thru the estate or required to be paid directly by my Step mother and myself along with any C.P.A fees incurred from the C.P.A . of the estate?

[LdiJ]

Originally Posted by lee sloan

Texas,
basically have a two part question. My step mother and I are the beneficiaries of a trust that was set up by my father, the distributions of the trust are made from stock dividends each month. My two part question is , the executor of the estate collects a trustee fee each month deducted from the gross total of the distribution equal to approx. 13%, is a trustee’s fee allowed to be charged at that % and for distribution from a brokerage firm? The second part is all income from that trust has been reported to the IRS and claimed on my taxes , from the last distribution there has also been included a deduction of a large amount (per the Trustee) to cover U.S Treasury Taxes for 2008, and U.S Treasury estimated tax 1st qtr. 2009, my question on this is , if I am already paying taxes on dividends received plus qtr. Estimates, are these other Taxes from the Account Value? And should the taxes be paid thru the estate or required to be paid directly by my Step mother and myself along with any C.P.A fees incurred from the C.P.A . of the estate?

13% as a trustee fee seems a little high to me, but I am not very involved with trusts.

One things that I can tell you about trusts however, is that either ALL taxes are pass through to the beneficiaries, or ALL taxes are paid by the trust. There are many different ways that a trust can be set up, but I am unaware of any way that would result in some taxable items passing through to the beneficiary and other taxable items being paid by the trust.

Have a local tax professional who is experienced in trusts review everything...or even perhaps a tax attorney experienced in trusts.