Expenses of administering a trust - when are they deducted?

[suesmithwhippet]

What is the name of your state? CALIFORNIA

I am one of two beneficiaries of a revocable trust, in which all of the assets have been already distributed, with the exception of a structured annuity, which nets out monthly payments until 2016. My sister is both settlor and trustee as well as the other beneficiary.

It is understood that there will be some periodic "expenses" associated with the administration of the trust, including the professional preparation of tax returns, and legal consultations the trustee initiates on behalf of the trust.

If I am reading the UNIFORM PRINCIPAL AND INCOME ACT (1997), correctly, expenses such as above are to be deducted from the "principal." But what is not clear is if these expenses are to be deducted from the beneficiaries distribution in the designated percentages, or evenly divided. Or "when" ...

Example: I received my "Feb 07 Trust Payment" which was substantially less than normal because of various "expenses the trust had this month..." Off the top of the base distribution, she deducted professional tax preparation services (services rendered 2/07), her trustee's fee, and consulation expenses with her trust "attorney" - who's services were rendered in 10/06. Should not this expense have been deducted in at the latest 11/06?

Thanks in advance ...Sue

 

[Dandy Don]

Trust expenses can be deducted at any time. You need to scrutinize your annual accounting statement to see if there is any way to determine whether your sister/trustee also had her half of this expense deducted from her share instead of deducting 100% from your share. I don't think you have anything to worry about since the principal is what is in the trust bank account and that is what the payment was taken from. You may want to ask for a copy of the bank statement to prove that the balance on the accounting statement is the same as what the bank balance shows.

DANDY DON IN OKLAHOMA ([email protected])

 

[BlondiePB]

I am one of two beneficiaries of a revocable trust, in which all of the assets have been already distributed, with the exception of a structured annuity, which nets out monthly payments until 2016. My sister is both settlor and trustee as well as the other beneficiary.

Your sister is the settlor (it's her property), the trustee, and a beneficiary of her OWN property who does NOT have to give you any of her property until AFTER she dies, and your complaining about her receiving Trustee Fees from her OWN property?

 

[suesmithwhippet]

Your sister is the settlor (it's her property), the trustee, and a beneficiary of her OWN property who does NOT have to give you any of her property until AFTER she dies, and your complaining about her receiving Trustee Fees from her OWN property?

Not complaining; questioning - since the INTENT of the trust was to be for the "...primary benefit of [our mother] during her lifetime..." and that "...opon the death of [our mother] the trustee shall distribute the assets..."; it would seem that she would be held to certain standards for distribution.

sls

 

[BlondiePB]

Not complaining; questioning - since the INTENT of the trust was to be for the "...primary benefit of [our mother] during her lifetime..." and that "...opon the death of [our mother] the trustee shall distribute the assets..."; it would seem that she would be held to certain standards for distribution.

sls

Who's property are you talking about?

 

[suesmithwhippet]

Who's property are you talking about?

You're the one who said it was the settlors.