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?
Estate Planning Attorney
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.
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.
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