Level 10

Simple or complex

14 replies
71 views

1. This survivor's trust has these provisions. The trustee and the surviving settlor are the same person. Is it a simple or a complex trust?

The trustee shall pay to or apply for the benefit of the surviving settlor… the entire net income of the trust… not less often than annually.”

The trustee shall pay… so much of the principal… as the trustee deems proper for the surviving settlor’s comfort, welfare, and happiness.”

2.If this is a simple trust, then all capital gains remain in the trust. True/False?

Tax Talk

BobKamman

Level 15

What keeps it from still being a grantor trust?

sjrcpa

Level 15

Was it a joint living trust (which I hate) and one person died?

Trying to figure out how the "survivor" is the settlor.

The more I know the more I don’t know.

BobKamman

Level 15

Bob

Would you do that work on March 24 or wait until after April 15? For me, that is 4-5 hours of time that I don't have.

In any case, the larger question that I hear is: do I have the expertise to do the work, and do I have the knowledge to evaluate the work of other CPAs? These are good questions for me to ask myself.

It shouldn't take more than half an hour to figure out if the trust directions were followed when the first spouse died. If the trust says split it in half, resulting in two halves, look at the first returns filed after the year of death and figure out who got which half. Then it might take 4-5 hours explaining to the survivor that it was all a big mistake from the day they walked into the office of the trust salesman.

George4Tacks

Level 15

From your description, this is a simple trust. A simple trust must distribute all income. If it is NOT a simple trust, then it is a complex trust. That is what I learned a few decades ago.

Just my 5¢ worth.

Answers are easy. Questions are hard!

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