Almost every aspect of creating a trust can be complicated. From picking a trustee to deciding how the trust assets will be distributed, there are a number of decisions that go into the legal document. And it doesn’t end once the trustor is gone; it can be just as time consuming when the trustee takes control.
What many beneficiaries may not understand is the process of handing out the inheritance. While it may seem fairly simple from an outside perspective, there are times when a trust distribution takes much longer than it normally would due to complications with taxes or legal battles.
While there’s no exact time frame, trust distributions are required to be made within a reasonable amount of time. That can span anywhere from five to 18 months after the trust administration begins, but in rare cases, it can extend years. When this occurs, there is often some sort of legal battle between beneficiaries and/or the trustee.
There are several steps the trustee needs to follow before a trust can be closed and the inheritance can be distributed. One of them includes gathering all the trustor’s documents and important paperwork. This step is necessary before a trustee can take over the administration of a trust.
Once that step is complete, the value of the trustor’s assets must be determined and all income and capital gains taxes must be filed and paid before distributions. The total amount of income in a year determines if a trust will have to file a tax return.
Finally, any outstanding bills and administration expenses must be taken care of before the trust can be closed and the assets can be transferred to the beneficiaries. The settlement process is highly dependent on the types of assets in the trust, the number of beneficiaries, taxes and the competencies of the trustee.
Do you have more questions about receiving your trust inheritance?
If you need help, please contact us by filling out our Contact Form or by giving our office a call at +1(951)686-3608.
As the most experienced CPA in the Inland Empire who specializes in working with seniors, Marcia L. Campbell is committed to helping each client thrive by caring for their personal and financial wellbeing with genuine interest, well-established expertise, and a focus on respectful partnerships. Marcia’s team specializes in a number of services including elder & financial care, court & trust accountings as well as private fiduciary and tax services. At Marcia L. Campbell, CPA, we understand the importance of our clients’ individual needs and are committed to helping them make the best personal and financial decisions for their future.