What costs, taxes and fees are involved when a trust is terminated?
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What costs, taxes and fees are involved when a trust is terminated?
What cost/tax benefit is there to create 2 new trusts vs 2 individuals receiving? Trust with 2 beneficiaries and the “split” is 50/50.
Asked on October 20, 2011 under Estate Planning, Texas
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The purpose of a trust is to defer the time period to pay estate taxes. If a trust is properly created it will do so and in the interim assets of a person can be transferred to various people (typically family members) on a yearly basis in accord with Internal Revenue Service regulations and guidelines to individual people to reduce the amount of the Estate of a person set forth in the trust. The annual amount a person can give to another person tax free is around $13,000.
The amount of a tax benefit for the creation of the desired trust depends upon how long the person(s) for whose benefit it is created lives (as well as the surviving spouse) and the number of beneficiaries under the trust where annual tax free distributions can be made. The cost for the set up depends upon how complicated the trust is and the number of assets that need to be transferred into it.
I suggest that you consult with an experienced Wills and Trust attorney for further answers to your questions.
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