Rental property is in Bypass Trust.  Value $800,000.

Surviving spouse rents a home to daughter and son-in-law, my client.

Son-in-law says they met with surviving spouse attorney and attorney said they could distribute rental out of bypass early.  Surviving spouse is not a client so I don’t have trust.

Son-in-law says survivors trust has assets of about 2.4 million and she wants the kids to have the house now since they are going to end up with anyway. 

How can you do this assuming the bypass only has an ascertainable standard for distribution? This wouldn’t qualify for maintenance or support, right?

If the house was distributed out of the bypass it could only go to the surviving spouse first and then she would have to gift it.  You would then use up $800K of her AEA.

There must be something I am missing.  I can’t see how an attorney would do this given the uncertainty in the estate arena right now.

Is there another way to do this?

Glenn
 
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Glenn B. Hammill
Hammill Accountancy, A P.C.
1148 Alpine Road, Ste. 204
Walnut Creek, CA 94596
Ph: (925) 944-4791