#2 is permissible but generally not a good idea.On 2, I was thinking of allowing the child as trustee of their own trust to distribute to themselves from the trust at their option for HEMS.
Yes, on 4 and 5 I meant the child to have that option and ability.
On 4, I thought it would only go into their estate if they actually did dissolve the trust, not if they merely had the option to do so...?
On 5, if they can't distribute income and they don't want to dissolve the trust itself, what good is them having a trust? Or are you hinting that they could distribute from trust principal?
(Some days you guys make me want to go to law school and learn all this myself directly.)
In #4 and #5, it would be in the child's estate if the child had the power to distribute to himself/herself (other than for health, maintenance, support and education), regardless of whether the child does so. That power could be held by a co-trustee, whom the child could remove and replace (provided the replacement is not a close relative or subordinate employee).
Exception -- #5 wouldn't throw it into the child's estate if the trust mandated distribution of the income, though that's suboptimal. It also wouldn't throw it into the child's estate if the child's power to withdraw were limited to the greater of $5,000 or 5% of the value of the trust each year.
You don't have to go to law school for this any more than you have to go to dental school to know which drill to use and how much to drill. Except for #2, any trusts and estates lawyer should be familar with these things.
Statistics: Posted by bsteiner — Fri Jun 28, 2024 8:22 am — Replies 5 — Views 558