Tax requirements for irrevocable trust — Terry Challenges Questioner!
We set up an irrevocable trust for my 94 year old dad. My financial advisor said I need to file a separate tax return for this. Is that accurate? And, what else should I know about being the trustee of this trust?
Thank you!
Terry Says
Wait — why would you want to do that? Moving assets into an irrevocable trust (as opposed to a REVOCABLE LIVING TRUST) could trigger taxable gains that need not be taken, and should not be taken since at death (under current tax law) they will get a “step up” in cost basis, saving a fortune in taxes!
Do you have any idea what you’re doing here?? Are you working with an estate planning professional? Are you just trying to get assets out of his name to qualify for Medicaid nursing care? (If so DONT DO THAT!). They will look back 5 years to recoup the money and you will doom his last years to sub-standard care!
Please feel free to call or email me to discuss before making any move like this!! (Terry@TerrySavage.com) and my phone is on my website. I have a very funny feeling about this question.
PS. Read this: https://www.terrysavage.com/is-your-estate-planned/
