T
tmrothen
Guest
My father would like to set up an irrevocable trust and received two conflicting opinions from 2 lawyers. He lives in New York City and has already exhausted the one time $675,000 lifetime exemption from gift taxes. He would like to put about $250,000 of stocks into this trust where his children would be the beneficiaries.
One attorney is saying that the $250,000 of stocks would be subject to the gift tax and when my father dies the basis of the capital assets would be the original price of the stocks.
Another attorney states that in New York, an irrevocable family trust can be amended if the grantor and the beneficiaries of the trust agree to the amendment. He states that if my father retains the power to change the interests of the remainder beneficiaries, the transfer of assets to the irrevocable trust is an uncompleted gift and would not be included on the gift tax return. Only upon the death of my father is the gift completed and at this point would be treated as an inheritance and the basis of the capital assets would be stepped-up to the fair market value as of the date of death.
Who is right?
One attorney is saying that the $250,000 of stocks would be subject to the gift tax and when my father dies the basis of the capital assets would be the original price of the stocks.
Another attorney states that in New York, an irrevocable family trust can be amended if the grantor and the beneficiaries of the trust agree to the amendment. He states that if my father retains the power to change the interests of the remainder beneficiaries, the transfer of assets to the irrevocable trust is an uncompleted gift and would not be included on the gift tax return. Only upon the death of my father is the gift completed and at this point would be treated as an inheritance and the basis of the capital assets would be stepped-up to the fair market value as of the date of death.
Who is right?