dpb60 wrote:

- quote -

I presume you mean the money went into a marital trust that provided
for the wife for the rest of her life, and then to the kids after
wife died.

- quote -

Nothing wrong with that.

- quote -

It should have been put into a separate trust on his death, using the
values at the date of his death. If that wasn't done, it will have
to be calculated as if it had been done that way at the time.

- quote -

Generally taxes come off the top, unless the will or trust says
something else.

Stu

dpb60 wrote:
- quote -

This is a bit tough to follow. This is how it should have worked: When
the husband died, he can leave the exemption amount, say $1M in the
trust, tax free, and an unlimited further sum to his wife. The whole
point is to protect the exemption of the million he can leave to other
heirs, otherwise, if it all went to the wife, on her death, his half may
become fully taxed.
Now, the sum ($1M) left to the trust should have been taxed all along,
i.e. each year it should have had some distribution to the heirs, but
either way, either the trust or the heirs should have paid income (not
estate) tax on the earnings.

Are you saying her half is now worth $4M? 2006-8 had a $2M exempt
figure. So if I read this right, $2M will be subject to estate tax.
I hope this comes close to answering you.
JOE

joetaxpayer wrote:
- quote -

I don't think there's any way in the world possible to answer this w/o
reading the trusts and the wills. This needs expert advice to whoever
is the executor of the estate.

I'll agree it probably is screwed up from what should have been done
since the time of the death of the first partner (the husband iirc?).

_IF_ (the proverbial big if) all the assets were actually in the trust
as they were likely intended to be, then there should be no estate taxes
per se. OTOH, if the trusts were created but not funded or only part of
the assets were placed in the trusts then there quite likely will be
some estate tax owed as well.

Who the beneficiaries of the trust are and how the assets should be
divided to maintain the provisions is going to take looking at the
details in detail imo.

Get a competent estate lawyer. It may be reasonably straightforward if
things were done properly or it might be a major screwup or anywhere in
between. I'd wager towards the messed-up end meself as it sounds as
though there wasn't a proper accounting made at the time of the first
passing most likely.

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========================================= MODERATOR'S COMMENT:
- please trim next time. "Trim" means
that except for a FEW lines to provide context, the previous posts are
deleted.

dpb60 wrote:

- quote -

This is a bit tough to follow. This is how it should have worked: When
the husband died, he can leave the exemption amount, say $1M in the
trust, tax free, and an unlimited further sum to his wife. The whole
point is to protect the exemption of the million he can leave to other
heirs, otherwise, if it all went to the wife, on her death, his half may
become fully taxed.
Now, the sum ($1M) left to the trust should have been taxed all along,
i.e. each year it should have had some distribution to the heirs, but
either way, either the trust or the heirs should have paid income (not
estate) tax on the earnings.

Are you saying her half is now worth $4M? 2006-8 had a $2M exempt
figure. So if I read this right, $2M will be subject to estate tax.
I hope this comes close to answering you.
(I missed that you crossposted. Some replies may not come through as a
result)
JOE

husband and wife 2 kids
set up a trust and will 25 yrs ago
husband dies 5 yrs later
has the kids as 50/50
no distribution to the kids
wife lives 20 more years
sets up her half for the kids 70/30
the estate was worth 1 million at his death
and 20 yrs later is worth 8 million at her death

how is the husbands half valued for distribution
is it at the time of his death which would make it 1 million
or at the time of her death 20 yrs later?
which would make it 4 million

also to the taxes come off the top
or does to 70% pay more taxes?