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The trust itself must report income to the IRS and pay capital gains taxes on earnings. It must distribute income earned on trust assets to beneficiaries annually. If you receive assets from a simple trust, it is considered taxable income and you must report it as such and pay the appropriate taxes.
WHAT IS A FAMILY GIFT TRUST? A Family Gift Trust (FGT) is a separate legal entity that is designed to receive and hold gifts of property. The beneficiaries are usually family members of the Donor, but can be other persons if desired.
Gift Tax Treatment Any transfer to the grantor trust will be subject to gift taxes unless consideration of equal value is received by the grantor in return. The funding of a grantor trust with the initial gift typically will be a taxable gift, but most often sheltered by the lifetime exclusion amount.
The grantor can set up the trust, so the money distributes directly to the beneficiaries free and clear of limitations. The trustee can transfer real estate to the beneficiary by having a new deed written up or selling the property and giving them the money, writing them a check or giving them cash.
A personal trust is a trust that an individual creates, formally naming themselves as the beneficiary. Personal trusts are separate legal entities that have the authority to buy, sell, hold, and manage property for the benefit of their trustors.
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A gift in trust is a special legal and fiduciary arrangement that allows for an indirect bequest of assets to a beneficiary. The purpose of a gift in trust is to avoid the tax on gifts that exceed the annual gift tax exclusion limit. This type of trust is commonly used to transfer wealth to the next generation.
A Trustee is a person or persons designated by trust instruments to distribute the estate assets to the trust beneficiaries. A beneficiary is an individual or entity who will receive the trust assets once the Trustee fulfills their fiduciary obligation to the Trustor.
This can mean a lot of different things, but most often, it means that when the deceased created an estate plan, it was established so that the beneficiaries did not inherit outright, but rather in trust. This means the assets that are inherited are titled in the name of a trust, rather than the beneficiarys name.
Inheritances are not considered income for federal tax purposes, whether you inherit cash, investments or property. However, any subsequent earnings on the inherited assets are taxable, unless it comes from a tax-free source.
The Irrevocable Trust is often used to make gifts in the following circumstances: 1. Life Insurance. Making gifts of life insurance policies (and the periodic amounts necessary to pay the premiums) to an irrevocable trust allows the life insurance death benefit, to pass without estate tax.

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