Legal Question in Family Law in Illinois

Trust Income

My wifes parents gave her a house in the form of an Irrevocable trust. She rents the house and it provides income. She files a tax return for the trust and then includes the profit from the trust on her personal income tax. The question is the remainder of the cash in the trust. Can she spend this money for personal items?

Example: The rent accumulates to $7,000 for a year. If the trust income tax preparer declares there is a $2,000 profit. She turns the $2,000 in on her personal income tax return.

Can she spend the remaining $5,000 on personal use outside of the trust?

Thanks


Asked on 1/20/02, 12:22 am

2 Answers from Attorneys
Jeffrey R. Gottlieb Law Offices of Jeffrey R. Gottlieb, LLC

Re: Trust Income

There is no way to answer this question without examing the trust terms closely. Is this a 'qualified personal residence trust'? If so, is the retained interest term over? Was it drafted with defective grantor trust language? If you would like me to review the trust for you, feel free to give me a call at (847) 991-2250.

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Answered on 1/22/02, 11:17 am
Sanford Martin Martin Law Office

Re: Trust Income

Yes, the income is hers unless a provision of the trust prohibits it and directs another use for the income (which is unlikely).

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Answered on 1/21/02, 9:14 pm


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