Legal Question in Wills and Trusts in Maine

Re: Inheritance in trust fund taxation

The taxes that apply are regular income taxes to you, so the actual amount of tax you would pay on your disbursements depends upon the rest of your personal tax situation, but you should consider it to be regular income and consult an accountant about how much to set aside for payment of the tax.

As to the reasosns for setting up the trust, they can range from someone setting one up simply because they were told it is a good way to distribute an estate outside of Probate Court (and therefore not public) to desiring a specific amount of control over the timing of distributions- i.e.-in an estate the property is all turned over at once, but a trust can parcel out income for life and direct the body of the trust to someone else. There is not necessarily any tax benefit to a trust.