Legal Question in Wills and Trusts in Utah
Trusts
My father set up a Trust. When he passed away 10 years ago, the properties, monies and investments went to my mother and into her Trust. Over the last 10 years she has sold, spent, or gifted the majority of her assets. She gifted each of us children with about $44,000 this year. (There are 10 children.) She is now in hospice care and will probably pass away soon. (She is 95 years old.) Is there any liability (tax or other) for all the money she has gifted to the children this last year?
She had about $10,000 remaining in her Savings Account Trust, which I transferred into a checking account recently. (I have her power of attorney.) So her Trust is now almost empty - I left $25 in the account to keep it open. I understand that it is best to pass away 'poor' without any assets left. Is that correct? After she passes, am I free to use the remaining $10,000 for her final expenses and then divide and distribute the remainder with my siblings? Should I completely empty and close the Savings Account Trust - take out the remaining $25?
I am a nurse, so all this legal stuff is a little confusing to me.
Thanks for your help.
--name removed--
1 Answer from Attorneys
Re: Trusts
You seem to be talking about two different issues. Under current law, if an estate is under $2,000,000, there is no federal estate tax of any kind (there may be a state estate tax, depending on what state she lived in when she died). The main issue may be Medicaid. If your mother goes into a rest home, and Medicaid has to pay, Medicaid is supposed to seek reimbursement from any transfers out of her estate, going back up to five years. This is not an estate tax, but may affect her estate more than a tax would.
There is no benefit to emptying out a savings acccount, and yes, you can use any funds she has left to pay for the funeral, and then distribute the balance among your siblings. If you have further questions, please feel free to contact me.
Randy M. Lish
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