Alex Can a complex trust be a grantor trust?
A CLT can be either a grantor trust or a complex trust. The grantor does not get an income tax charitable deduction for the transfer to the trust. The trust is entitled to a charitable deduction for any amount of gross income paid to a charity during the year.
Is a life insurance trust simple or complex?
The trust will generally be considered either a simple trust or a complex trust. If gifts are used to pay premiums on life insurance, upon the insured’s death, the GST exemption would be considerably leveraged, enabling the grantor to pass substantially greater assets in a tax and asset protected trust.
What happens to a trust after the grantor dies?
Now let’s discuss where a lawyer can help in the “trust administration” process after the death of the creator of the Trust, “the Grantor” or “the Trustor”. First, when a decedent dies, who was also serving as the Trustee of the Trust as well as the Trustor, you must “breathe life into the Trust”.
Can a grantor trust tax the beneficiary?
The grantor-trust rules, found at Internal Revenue Code §§671-678, sometimes tax a trust beneficiary on the trust income. In a beneficiary-grantor trust an individual (the grantor) creates a trust for another individual’s benefit (the beneficiary).
Can a beneficiary be named as a successor trustee?
It is also common for a beneficiary to serve as a trustee or be named as a successor trustee following the death of a grantor who serves as his or her own trustee. In some cases, a grantor may name a lawyer or firm as a trustee. Trusts allow individuals the chance to ensure the financial health of their loved ones after they are gone.
What happens to the beneficiary’s share in a trust?
The beneficiary’s share may pass to his surviving children. The beneficiary’s share may pass to his surviving siblings. The beneficiary’s share may pass to a charitable organization named by the decedent. The beneficiary’s share may revert to a common pot for the benefit of multiple beneficiaries.
The grantor-trust rules, found at Internal Revenue Code §§671-678, sometimes tax a trust beneficiary on the trust income. In a beneficiary-grantor trust an individual (the grantor) creates a trust for another individual’s benefit (the beneficiary).
Who are the beneficiaries when a trust dies?
If you’re named as a beneficiary of a trust you should be notified by the trustee after the person who made the trust dies A trust can have multiple beneficiaries, including the grantor during their lifetime A trust beneficiary is the person who benefits from a trust, usually by receiving the trust income or assets.
What happens when the grantor of a nolo Trust dies?
If you used a Nolo Living Trust, the process works differently depending on whether you made an individual living trust or a shared trust with your spouse or partner. When the grantor, who is also the trustee, dies, the successor trustee named in the Declaration of Trust takes over as trustee.
What are the rules for a complex trust?
Complex trusts may accumulate income, distribute amounts other than current income and, make deductible payments for charitable purposes under section 642(c) of the Code. C. Grantor Trust A grantor trust is a trust over which the grantor has retained certain interests or control. The grantor trust rules in IRC 671-678 are anti-abuse rules.