The Tax Book: Real Answers, Real Fast!       HOME       ORDER       ABOUT US       CONTACT
Results 1 to 10 of 10

Thread: Joint Revocable Family Trust in Community Property State?

Threaded View

  1. #1
    Join Date
    Dec 2005
    Location
    Missouri
    Posts
    1,689

    Default Joint Revocable Family Trust in Community Property State?

    Something new to me.

    Client lives in a community property state and I don't know much about such since I don't practice in a community property state and the fact that I have never had a "joint" family revocable trust to deal with.

    Husband and Wife had/have a joint revocable trust in the name of "The [family last name] Revocable Trust" with husband and wife as co-trustees (hereafter referred to as the family trust). Beneficiaries of the family trust are the husband and wife's 2 adult children.

    Husband died in 2006 after required minimum distributions from an IRA account had begun in prior years and his IRA listed their joint family trust as the beneficiary. The attorney after death amends the family trust to remove the husband's name. No husband estate tax return required, no 1041 requirement expected but not yet determined.

    The family trust has a paragraph that gives the trustee rights to determine the manner and timing of payments (received as a beneficiary) by lump sum or otherwise as permitted under IRC §401(a)(9).

    The questions asked here:

    1. Since the family trust is still a revocable trust (with wife only trustee due to amendment) does the required minimum distributions received by the family trust simply get reported on the family trust grantor wife's 1040, page 1, line 15 or 16, ignoring the family trust as such?

    2. Does the death of the husband create a separate irrevocable trust that must be reported on a 1041 for some reason? I think not as the distributions received are by the family trust as a beneficiary.

    3. Is the full amount of the retirement account taxable in the year of death or does the minimum distributions only get taxed by the wife as received and stated in question 1 ?

    4. Is the required minimum distribution calculated over the life of the wife or beneficiary of the revocable family trust (oldest adult beneficiary in this case a child of the wife), or continue on the same method as was the dead husband that was receiving distributions at time of death?


    All opinions would be appreciated. Thanks, OldJack.
    Last edited by OldJack; 02-08-2007 at 02:58 PM.

Similar Threads

  1. MFS with NOL carryover
    By jmc in forum Main Forum / Tax Discussion
    Replies: 2
    Last Post: 02-01-2007, 02:36 PM
  2. Community Property vs. Joint ownership
    By Bill Tubbs in forum Main Forum / Tax Discussion
    Replies: 4
    Last Post: 11-22-2006, 01:32 PM
  3. Residence Sale
    By Kram BergGold in forum Main Forum / Tax Discussion
    Replies: 7
    Last Post: 08-27-2006, 01:49 AM
  4. Difficult Trust Question
    By Koss in forum Main Forum / Tax Discussion
    Replies: 6
    Last Post: 03-10-2006, 02:24 AM
  5. Community Property
    By S T in forum Main Forum / Tax Discussion
    Replies: 5
    Last Post: 12-19-2005, 12:24 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
Disclaimer: This message board allows participants to freely exchange ideas and opinions on areas concerning taxes. The comments posted are the opinions of participants and not that of Tax Materials, Inc. We make no claim as to the accuracy of the information and will not be held liable for any damages caused by using such information. Tax Materials, Inc. reserves the right to delete or modify inappropriate postings.