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How do we close out an exsisting trust in Michigan?

League City, TX |

My uncle died a year ago. A trust was created where my father (his brother) is to be taken care of the rest of his life if he cannot support himself. My father can support himself without the money from the trust. My father (a very private man) refuses to release tax returns and bank statements in order to be eleigble for funds as requested by the bank. If my father dies or wants to remove himself the reamaining monies in the trust will are to be released to myself (nephew), my sister (neice) and charites in that order. How do we notify the trustee (bank) that my father is ready to release his name and distribute the funds in accordance to his brothers will? Hope this makes sense?

Attorney Answers 2


  1. Michigan law allows your father to do what's called a disclaimer (MCL 700.2902 is the legal cite) Your father can contact the trustee and inform him he wishes to do this. They ought to be able to provide the appropriate paperwork. There may however, be certain tax ramifications as a result of this, but there's not enough info here to get into that. I'm going to suggest you consult either a cpa or attorney in your father's area to address those.

    The information provided is based solely on the general information given and should not be construed as legal advice for your specific situation.


  2. The use of a qualified disclaimer may or may not work here. The disclaimer period for a qualified disclaimer at the federal level would be 9 months. So there would be gift tax implications if your father disclaims. If the disclaimer had been timely at the federal level it could have been done with no such tax implications for your dad. He would have to file a gift tax return if he disclaims. But since the unified credit exemption is now $5 million dollars, there would probably be no current gift taxes and no impact on his ultimate federal estate tax at his death. This assumes his own estate is nowhere near that $5 million amount. So he could still disclaim, although late, but would have to file a gift tax return, Form 709, to reflect the gift he is making to you.

    Hope this helps. Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net . For further tax advice visit his website at www.sjfpc.com . and blog at >

    LEGAL DISCLAIMER Mr. Fromm is licensed to practice law throughout the state of PA with offices in Philadelphia and Montgomery Counties. He is authorized to handle IRS matters throughout the United States. His phone number is 215-735-2336 or his email address is sjfpc@comcast.net , his website is www.sjfpc.com. and his blog is <http://frommtaxes.wordpress.com/> Mr. Fromm is ethically required to state that the response herein is not legal advice and does not create an attorney/ client relationship. Also, there are no recognized legal specialties under Pennsylvania law. Any references to a trust, estate or tax lawyer refer only to the fact that Mr. Fromm limits his practice to these areas of the law. These responses are only in the form of legal education and are intended to only provide general information about the matter within the question. Oftentimes the question does not include significant and important facts and timelines that if known could significantly change the reply or make such reply unsuitable. Mr. Fromm strongly advises the questioner to confer with an attorney in their state in order to ensure proper advice is received. By using this site you understand and agree that there is no attorney client relationship or confidentiality between you and the attorney responding. This site should not be used as a substitute for competent legal advice from a licensed attorney that practices in the subject area in your jurisdiction, who is familiar with your specific facts and all of the circumstances and with whom you have an attorney client relationship. The law changes frequently and varies from jurisdiction to jurisdiction. The information and materials provided are general in nature, and may not apply to a specific factual or legal circumstance described in the question or omitted from the question. Circular 230 Disclaimer - Any information in this comment may not be used to eliminate or reduce penalties by the IRS or any other governmental agency.

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