I have a client whose Mother just passed away leaving a trust for her grown children. A few years the Father passed away and the 6 kids each inherited 1/6 of 1/2 the land. Now the Mother passed away and she put her 1/2 of the land into an irrevokable trust. The one son rents all of the farm land.
The kids' lawyer said they should put all of the land into the trust to keep things simple. Then, the brother can write one rent check to the trust, instead of writing a check to the other 5 siblings and a 6th to the trust.
Does this make sense and is it correct? Don't trusts pay a higher tax?
If all of the land stays in the trust, does the trust pay the tax? Or, does it pass through to the beneficiaries - the kids?
Thank you in advance for you advise.
The kids' lawyer said they should put all of the land into the trust to keep things simple. Then, the brother can write one rent check to the trust, instead of writing a check to the other 5 siblings and a 6th to the trust.
Does this make sense and is it correct? Don't trusts pay a higher tax?
If all of the land stays in the trust, does the trust pay the tax? Or, does it pass through to the beneficiaries - the kids?
Thank you in advance for you advise.