Distribution to Trusts

[Jill Graff]

Background: Taxpayer died and left everything to her 4 kids. A Form 1041 is required until they sort out all of the distributions (homestead and brokerage accounts). The 4 kids each set up a trust and the house was put into a separate trust.

Question: There were cash distributions directly to the 4 kids and there were separate cash distributions directly to the trusts. The will is silent about the trusts. Do I show K-1s for the 4 kids and the 5 trusts or are the distributions to the trusts really distributions to the kids and they then put the money into trusts.)?

Thank-you in advance for any help.

[Burke]

If the will says nothing about trusts, and there was no pre-existing trust prior to death, then these are just cash distributions from the estate to the beneficiaries named in the will even if they were made directly to these trusts on their behalf. You will do a 1041 and K-1's to the kids for the estate income and expenses only. Did the will give power of sale of the real estate to the executor? Need to research your state law as to how real estate passes.