Legitimate Expenses for Irrevocable Trust

Once an irrevocable US trust is created, what are legitimate expenses that can be charged by the trustee against the income of the trust? If the grantor remains a trustee, can she cover her travel expenses to visit the bank and the beneficiaries of the trust, to review trust-related issues?

Relative to the issue of the trust being irrevocable, is there any way to create flexibility on the actual list of beneficiaries or relative amounts to be given to each of those people prior to the death of the grantor? Is there a way to make the trust itself irrevocable, but give a trustee after time of death some discretion in how the benefits are divided among the beneficiaries?

Reply to
W
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It's like with anything else - espenses that are ordinary and necessary to the business or investments of the trust can normally be charged to the trust. In part it will depend on exactly what the trust says, and in part what the law of your particular state says.

Yes, the kind of flexibility you want. It's all based on how the trust is drafted. If you can't find it in the trust as it is now, you won't be able to do it, unless you can convince a court to do it for you.

Reply to
Stuart Bronstein

Can you give a few examples of the kind of flexibility about the size of the gift to each beneficiary that can be left in the hands of the trustee?

What are some limitations on that flexibility?

Reply to
W

If you make explicit what you want in the terms of the trust, you can do pretty much whatever you want. However if a trustee has too much power to make gifts to himself [directly or indirectly], there might be an income tax problem. And there might be a gift tax problem. But as long as you're not rewarding illegal or antisocial behavior (e.g. stating that a beneficiary won't get anything until he divorces a wife you don't like), anything you make explicit is probably going to be OK.

Asking vague, open-ended questions in this regard is really unproductive. Entire books have been written on this kind of topic, and without specific facts to narrow it down, there really is no good way to answer your questions other than in the vagues terms.

Reply to
Stuart Bronstein

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