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Irrevocable Trust

Asked over 2 years ago - Los Altos, CA

I have been asked to be a trustee of an irrevocable trust worth a substantial amount of money. The settlor is a friend and the beneficiary is the settlor's niece.

I realize that there will be income tax issues but I would like to know if there will be gift tax issues as well.

For example, if I give $20k to the beneficiary by the end of this year, does that cut into my lifetime gift tax exclusion of $1M? Please advise, thank you.

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Attorney answers (1)

Janet Lee Brewer

Reputation Level 16

Answered over 2 years ago. Trusts Attorney in Palo Alto, CA.

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If you are acting solely as the trustee of this trust (you are not the "settlor" and you are not the beneficiary), then your gift and estate tax exclusions are not affected by any distributions you may make from the trust. There are a number of trust administration rules you need to follow. Make sure you have a knowledgeable lawyer assisting you (as well as a knowledgeable income tax professional).

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for individual advice regarding your own situation.

Janet L. Brewer - Certified as a Specialist in

Probate, Estate Planning, & Trust Law by the

California State Bar Board of Legal Specialization

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