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11-10-2008, 06:56 PM
| | Junior Member | | Join Date: Nov 2008
Posts: 6
| | | Can a Trust gift to a beneficiary
What is the name of your state (only U.S. law)? Il
Can a beneficiary of a trust be gifted money from the trust, subject to the same rules as an individual would be (i.e. limited to $12,000 per person)What is the name of your state (only U.S. law)? |
11-10-2008, 07:05 PM
| | Member | | Join Date: Mar 2002 Location: oregon
Posts: 667
| | | Who is the Trustee? Has the Trustor died? |
11-10-2008, 07:09 PM
| | Junior Member | | Join Date: Nov 2008
Posts: 6
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I am the Trustee. The trust was established by my parents, and they are wondering about gifting money to the beneficiaries. This will give them some money now, and more later when they pass away |
11-10-2008, 08:30 PM
| | Member | | Join Date: Mar 2002 Location: oregon
Posts: 667
| | | Absolutely no problem. The assets are treated the same (until they pass) by the IRS as if it were theirs without the Trust.
Curious as to why you are the Trustee and not your folks? Most often the husband and wife are co-trustees with the children as successor trustees.
Last edited by curb1; 11-10-2008 at 08:33 PM.
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11-11-2008, 01:43 AM
| | Senior Member | | Join Date: Mar 2006
Posts: 5,018
| | | One potential reason is because the trust has already been gifted to get it out of the lookback period for medicaid. (aka irrevocable trust)
I'm not sure the question can be answered on the facts given. There could be a problem or no, we cannot be sure yet. If a revocable trust, then there would be no problem, but it seems from the way the question was worded and the facts which are there it may not be.
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11-13-2008, 10:39 AM
| | Junior Member | | Join Date: Nov 2008
Posts: 6
| | | The trust is irrevocable (for medicaid / asset planning). There has been no gifting yet, since both parents are still living. |
11-13-2008, 11:26 AM
| | Senior Member | | Join Date: Mar 2006
Posts: 5,018
| | | If the trust is irrevocable, it has already been gifted to the beneficiaries. The parents cannot have a say over how the trust is distributed at this time or it would show too much control over the funds to remove it from the medicaid lookback period. It would be very unusual for a trustee to have the power to gift funds from the trust. He may be able to follow the trust and determine some need fits the trust's guidelines for a distribution to the beneficiaries.
The basic answer to your question is no, the trust cannot gift to a beneficiary. To further refine the answer, see an attorney.
__________________
When you are a Bear of Very Little Brain, and you Think of Things, you find sometimes that a Thing which seemed very Thingish inside you is quite different when it gets out into the open and has other people looking at it.
--W. T. Pooh (aka A. A. Milne) |
11-13-2008, 11:35 AM
| | Member | | Join Date: Mar 2002 Location: oregon
Posts: 667
| | | Thank you for the clarification that this was an irrevocable trust. |
11-13-2008, 11:37 AM
| | Junior Member | | Join Date: Nov 2008
Posts: 6
| | | Thank you for your help. | |
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