As my mother in law got older, we went to an attorney and set up a
living trust. i.e. A trust that is set up using her social security
number, for which, I am the trustee.
For the last 3 years, she's been in a memory care facility, and I've
transferred funds out to cover the cost.
It was written with the intent of keeping her irresponsible daughter (my
sister-in-law) from having access to a windfall. I'll distribute 5%/yr,
and at my discretion, handle 'emergencies'. Even though my wife is
entitled to money, she won't request anything. Fortunately, the
sister-in-law knows she is awful with money, and always thought my
handling it was the best course. No resentment, the exact opposite.
The question - my Mother-in-law is in her last days now, sleeping 20+
hrs a day, and not eating. When she passes, what changes do I need to
make via the Trust? As mentioned, it's currently using her SS#. Do I
need to change this? I imagine I do, but am not sure of the process.
We have an irrevocable trust for my daughter, which was set up with its
own tax ID, and I file a return for it, basically info-only, as all
income is distributed each year. This situation is new to me.
The first thing to do is to make sure the trust owns all her
property, real and personal. Then you have to pay her debts. You
probably also know that the death triggers
Upon her death the trust becomes irrevocable, and a separate tax-
paying entity. So it needs a new EIN, which you can get on the IRS
website. Put "EIN" in the search box when you get to the webiste
As long as you follow the directions in the trust, it doesn't have to
be hard. Good luck.
Thanks, Stuart. Yes, no more IRAs, the house sold, car sold, etc. A
small checking acct will cover funeral and last credit card bill my wife
used for incidentals. We'll notify her employer (she was a teacher) and
Social Security of her passing. I get to do one last Mitzvah for my MIL,
continuing to manage this for my sister in law. Again, thanks.
Just curious. Will the remaining funds in this trust [revocable to irrevocable] be distributed; and the trust will then be terminated after that?
If not terminated, then are you one of the beneficiaries of this trust? If yes, I am just wondering about the consequences (if any) of you being both the trustee and a beneficiary of the trust.
It depends on just what the trust says.
Again, it depends on exactly how the trust is drafted. A truste that
has a person who is both a trustee and a beneficiary has an increased
chance of being considered a grantor trust, at least to an extent. But
if it's drafted properly it doesn't have to be.
A "grantor trust" is one which is ignored for tax purposes, and the
"grantor" is treated as treated as the actual owner of trust property
for tax purposes, meaning any trust income is taxed to him
personally. Sometimes it's beneficial to do that, other times not.
Being a "grantor" in this situation does not limit powers given to a
trustee in the trust.
You should talk to the lawyer who drafted the trust to get more
information, because almost everything is dependent on how the trust