When property held in an AB Trust is sold, what happens to the proceeds?
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When property held in an AB Trust is sold, what happens to the proceeds?
Does surviving spouse have right to the total amount?
Asked on July 15, 2014 under Estate Planning, Connecticut
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 9 years ago | Contributor
As with any issues on Trust proceeds - regardless of the type of trust it is - the wording of the trust document will be the governing source on how the proceeds may be distributed. In other words, the rights of the surviving spouse has depends on the provisions of the trust itself, and this language in the trust itself is governed by the limits of the IRS. If the trust grants the surviving spouse more power than the IRS allows, she illegally owns the property of the trust. That said, the trust becomes a Living Trust now and generally the surviving spouse's rights and benefits include receiving all income from the trust property, including interest; using the property; and spending to benefit his or her health, support and maintenance, standard of living, and education. So speak with your attorney and see what will be. Good luck.
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