Q: I am the granter of a irrevocable trust set up as the beneficiary for a life insurance policy on myself. I want to
make a partial surrender of the policy to get money to pay my personal taxes. The trustees have agreed to this partial surrender . The insurance company has determined that the surrender is not a taxable event. What problems can I face legal or tax wise if i take the funds to pay my personal taxes.
Lawyers, want to be a Justia Connect Pro too? Learn more ›
- (931) 250-8585
- View Profile
- Answered
A: There are many potential issues, not the least of which is your use of the assets in this trust as your personal piggy bank could cause the whole purpose of the trust to be derailed. There is a right way to do this and a wrong way. You should consult with the attorney who help you set this up. If he/she is not around, consult with an experienced estate planning or elder law attorney.
Lawyers, want to be a Justia Connect Pro too? Learn more ›
- New York
- (646) 775-3455
- View Profile
- Answered
A: The trust agreement should be reviewed before giving you specific advice but I see several problems with this scenario. If the trust is liquidating any of the assets to be used for your personal benefit I expect the IRS will consider it property of your estate when the time comes. A proper review of your trust agreement and your personal needs should be completed by an estate planning attorney, who can properly advise you.
Richard William Cutler agrees with this answer
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
