estate & gift?

Question

Can a estate (specifically a trust) give a gift (post death but before everything is final) to the inheritor?

Explain possibility, and then tax consequence.
I need to pull some small about of funds from the inheritance whether I do it now or when I actually get it all

Answer 1

I believe that, in general, the estate is allowed to distribute a portion of the inheritance prior to final settlement. If there is only one heir, not too many issues can arise from doing this.

A trust is different from an estate and it must follow the rules of the trust document as to the timing of distributions.

There might be some income tax impact from the distribution, but this is likely to be a "good" impact.

For answers to your specific situation, you should discuss with a CPA or attorney.

Answer 2

No, you can't 'gift it' but you could take an advanced draw, as long is there is no danger of the estate failing to pay other debts and doesn't avoid paying taxes.

The biggest key is to keep full and complete records. The attorney handling the estate can provide details. If you don't have an attorney, you should consult one.

The only legal advice in this note is that to talk with an attorney. If it had been anything more, it would come with a bill.

Edit -> Trusts are subject to the terms and conditions of the trust and vary accordingly. There may not be a way to take money out of a trust prior to the rules associated with that trust.

Answer 3

The answer to your question should be found in the terms of the trust. Without reading that document it would be foolish for anyone to guess if any amount can be taken. Normally inheritance income is tax free if the money was taxed to the decedent. Any interest that may have accrued post the date of death will be taxable to the trust or to the recipients.