Legal Question in Wills and Trusts in California
Who pays what tax in a family trust?
When both trustors in a family trust have died and the trust is handled by the executor, how are the taxes paid on a specific bequest to me? I am the daughter of the trustor. The executor and trustee are sons of the trustor. I would guess the estate to be valued around 2 million dollars.Does it seem correct for 40% of my specified amount to be taken away by "death tax" and "California pick-up tax"? Also, am I entitled to see the entire trust if I'm named as an heir?
Shouldn't I pay my own inheritance tax?
1 Answer from Attorneys
Re: Who pays tax in a trust?
Taxes are generally paid out of the trust by the Trustee to ensure they are paid. Usually, each gift is reduced by the proportion of estate tax owed on that gift.
As for the amount of tax being paid, no one can tell you what's appropriate without seeing the trust. Under recent California law, beneficiaries are entitled to a copy of the trust once it becomes irrevocable, if the Trustor died in 1998 or after. You are probably also entitled to an "accounting" at least once a year, which should show you the value of the trust assets.
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