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Member
 
Group: Forum Members
Last Login: 3/9/2006 9:13:21 AM
Posts: 35,
Visits: 10
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| 'We are ready to fund a Bypass Trust with the surviving spouse as the beneficiary and a niece and nephew as the remainderman beneficiaries. The surviving spouse would like to begin distributing funds from this trust of which she is the trustee to the niece and nephew. She believes she will never need these funds in her lifetime and wants to help out the niece and nephew of the Decedent. There is no language that I could find that allows her to make these distributions. Can she make these distributions, if she can what do we need to do to make it work? Simply keep an accurate accounting? Have the remainderman acknowledge the amounts and that they will reduce the amounts that they get upon the surviving spouse's death? Thank You.
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Member
Group: Forum Members
Last Login: 3/9/2006 9:13:21 AM
Posts: 35,
Visits: 10
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| 'This may be one for her attorney, since her goal seems to be to circumvent her husband's estate plan for part or all of his interest in their property. If there is no express language authorizing direct distributions to the remaindermen, then it looks like she can't. However, she could discuss the following with her attorney, with advice from you on the gift tax consequences: 1. Making gifts of the distributions she receives, including any discretionary distributions to which she may be entitled. 2. Disclaimers, if still available. 3. Partial or complete termination of the trust under state law.
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Member
Group: Forum Members
Last Login: 3/9/2006 9:13:21 AM
Posts: 35,
Visits: 10
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| Since there is a bypass trust, the surviving spouse must be pretty well off herself. She could make gifts from her own assets. Or, as John mentioned, she could send all the income of the bypass trust to the niece and nephew. Or possibly she could loan them money secured by appropriate note and trust deed on property. You may have some gift tax returns to prepare. bill
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