Legal Question in Tax Law in California

Re: Trusts and Taxes - minor and young adult

It sounds like your question falls directly in our alley; we specialize in trusts and estates.

Because of the complexity and privacy of your situation, I would ask that youcall our office and request speaking to Charles Schofield, our senior partner and expert at tax matters. He is at extension 1 and his assistant is at extension 2.

Our number (not allowed to write it in the message) is the one posted by LawGuru as well as listed on our firm's site at No-Probate.com.

Scott

Re: Trusts and Taxes - minor and young adult

Their seems to be a couple things going on here that are not legal, or at least not correct.

With regards to the trusts, there are one of two different things that should be happening. My guess is that these trusts do not pay to your children until a certain age? If that is the case then one of three things scenarios should be happening:

1) the trusts (if irrevocable as you have described them), are generating income and this income is being dispersed to a third beneficiary (such as your husband), if this is the case then either A) the trust should be paying the taxes generated on the income or B) the person receiving the distributions should be paying the taxes on the income.

2) the trust is generating income and is keeping the income inside of the trust. In this case the trust should be paying it's own taxes and the trustee is responsible for making sure that is done.

3) the trust is generating income, it is supposed to be dispersing income to your children (and thus they have something to pay taxes with). In this scenario either A) your children or their caretakers (for minors) are responsible for the filing of taxes. or B) the trust should be paying the taxes.

If what should be occurring is scenario C, and your husband is taking the money, not spending it on the children and sticking you with the taxes... Then you probably have a significant legal claim against your husband and possibly the trustee of the trust. Nobody including your yourself or your children, should be having income allocated to them for tax purposes without income actually being given to them.

You need to speak to an attorney, because it sounds as if something improper is being perpetrated against your or your children. Of course without seeing the trust documents and the distribution information, I would have a hard time telling you exactly.