Legal Question in Wills and Trusts in California
The Situation is that My mother passed in 2007 ( in California where she
> was a Resident Alien since 1963 ) with a living trust in effect which then
> converted ( wrong term perhaps ? ) to an estate ,with her 1965 built house
> , being the main asset . As the real estate market in California was at
> it s worst , selling was not an option for my Brother (executor or trustee?) and I ,
> so we decided to rent out the 1965 house . The condition of the house was
> poor , such that we put $25,000 dollars of our own money into it to create
> a rentable piece of property ( it rents for 2k month ). Question 1:
> Can we legally recover the $25k of our own money by withdrawing it from
> the accumulating rental income ? or any other way ? Question 2: Can we
> also legally withdraw the full monthly rental income from the estate ( as
> long as we are obviously claiming it as income to us individually ) ? Or a
> portion of it ?
>
1 Answer from Attorneys
If you were both named as beneficiaries, yes, you should be able to send the income to yourselves unless there are terms in the trust that prevent that. Furthermore, the trust is required to file tax returns to report the income and pay the tax thereon throught the trust, or to pass the income to the beneficiaries for them to report the distribution of income on their taxes.
You or your brother should have someone review the trust and make sure you are doing everything properly.
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