Legal Question in Wills and Trusts in California

If the survivor of a trust that provides for an AB trust is permitted to distribute assets between A and B for HER benefit snd she allots assets at the time of her spouse’s death in order to avoid estate taxes, can the survivor redistribute assets again at a later time in order to protect her children from capital gains on the sale of the family home, for example.


Asked on 4/20/20, 6:18 am

1 Answer from Attorneys
Scott Jordan Jordan Law Office

First, I am not sure how a redistribution from the A or B trust would effect the Capital Gains on a sale of an asset. Nevertheless, if the trustee filed an estate tax return with the division of assets, the Trustee cannot now redistribute the assets. If not, then I would argue that a distribution never actually happened and the trustee can do it now. However, if both Settlors are now deceased, there is probably no reason to even divide the assets.

As there are many variables, I strongly suggest you seek the advice from an attorney or CPA or both who have a chance to review all relevant documents.

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Answered on 4/20/20, 10:19 am


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