Discussion:Forgetting to Fund A By-Pass Trust
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Discussion Forum Index --> Tax Questions --> Forgetting to Fund A By-Pass Trust
| 16 May 2008 | |
| Here the question,
First spouse died in 2003, an estate tax return was filed with the CPA taking a deduction of $ 599 K for a by-pass trust. Well enough The second spouse dies in 2004 and the same CPA when filing the estate return excludes the assets that were supposed to be in the by-pass trust. Family never makes distributions and from 2004 to 2007 assets generate income. A fidicuary tax return should be filed for every year, the question is by filing will it trigger a red flag agaisnt the estate as the by pass trust was never funded. | |
| 17 May 2008 | |
| Or a tax professional who actually knows the law. Everything depends on facts and circumstance. The typical situation in which the stuff just sits will allow the funding of a stale trust. No fiduciary returns will be required if surviving spouse has reported all income on personal returns. Delayed funding, however, must be "representative." It is also possible for the actions of the surviving spouse to have made all assets includable in his estate. If the attorney is not a specialist the matter should be referred. Given the bare bones of your fact pattern the likely outcome will be at least two fiduciary entities and multiple separate shares. | |
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