Q: Do the beneficiaries of a living trust have to pay estate taxes?
A: Depends. Generally, a living trust is established during one's lifetime and are revocable. Thus, transfers to the trust are not exempt from the person's estate the gave to the Trust. Once a Trust is established, it may have its own income tax liability. Whether Federal estate taxes are triggered is determine by what falls under the taxable estate and if it hits the threshold in effect at time of death.
A: There are so many variables that may be contained in a living trust that it is difficult to answer. In general, estate tax is imposed on the value of the estate and is owed by the estate rather than the beneficiaries. In addition, you would have to identify what assets are part of the taxable estate and whether the value exceeds the threshold that may apply
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