FAQS Page 3


Who besides the Trustee can drive a Trust held vehicle?
Anyone the Trustee authorizes to do so.

When purchasing Home or Auto Insurance for assets in Trust, who is on the Title and does the Trust pay all premiums?
Title to Trust and Trust pays premiums.

Can the Trust operate a business in its name or is it required to utilize a LLC when doing so?
Yes. Not Required.

What type of items can be considered Trust assets and can be capitalized and placed within the trust?
Anything whatsoever.

Frequently Asked Questions

Are there any time intervals that are required by the Trustee to hold beneficiary meetings on the status of the Trust or any investments the beneficiaries should be made aware of prior to Trustee participating in them?
No. The beneficiaries have no right to know about any Trust business affairs.

Is there a way to remove a Compliance Overseer once they hold that position?

Does a Trust pay for all expenses from a beneficiary function wherever it is held?

Can a beneficiary travel to view a Trust Property or any other asset purchase if the Trustee is not present?
Only with permission of the Trustee or a standing permission.

Is it wiser to purchase clothing items etc, that may be used by Trustee that present a professional image when at Trust functions out of income paid to Trustee by the Trust or allowing the Trust to pay for items that will be for Trust use and purpose?
Trust only pays for items to be used for Trust business.

Do all signatures (Trustee/Witness and Settlor/Witness on page 6) have to be the same date?

Can a beneficiary whose children are grown and grandchildren eligible to travel with expenses paid by the Trust when traveling on Trust business?

Can I purchase a non-qualified annuity from a trust and pay it to an outside person?
Yes, the Trust can purchase a non-qualified annuity, but no, the beneficiary cannot be an outsider. They must be the Trustee or Trust Beneficiary. The Trust should be the owner and beneficiary of the annuity and the annuitant will be the Trustee or Beneficiary.

What is a more specific example regarding annuities?  A mom is a Trustee and she lists her daughter as a beneficiary. Let’s say the daughter is a single mom having a hard time making ends meet. Her mom wants to help by giving her daughter $2,000 a month for 20 years with no taxes except for interest earned on the annuity. Can this be done?
No. Because the daughter did not pay for the annuity any payments from the trust would be taxable income to her. If the mother personally gifts the daughter the amount needed to purchase the annuity, then the principal payments from the annuity would be tax free to the daughter. A gift over $15,000 would require a Gift Tax Return and would go against the mother’s lifetime exemption. If the annuity is purchased by the Trust, the Trust must be the beneficiary and receive the payments, not a Beneficiary of the Trust. If the mother deposited the purchase amount into the Trust, this would increase her Demand Note which she could then draw out principal payments tax free. The only exception to the above would be if the is the Annuitant is the daughter and the annuity carries a Death Benefit on the daughter, then the daughter’s estate would receive the death benefit tax free when she passes.

What are the implications of moving assets from one trust to another?
This can be dangerous, because there is an obscure IRS regulation that could be violated by this action. The IRS says that any diversion of anticipated income is tax evasion. Assets or anything in the Corpus of the Trust is Trust property and has no gift basis when placed in Trust. Therefore, for a Trust to endow or gift another Trust with one of these assets is not an authorized transfer. Currencies purchased for the revaluation prospect could be considered diversion unless sold or loaned to the Beneficial Trust. The proper way to accomplish this is to have the second or third Trust purchase the currency before the revaluation. Now, the currency has simply gained in value and this gain is declared to the Corpus and is Extraordinary Dividends declared by the Trustee and is not current taxable income to the Trust.

Do I get a Demand Note for assets I put into the Trust?
Yes, the basis (cost) of any asset legally sold to the Trust will be reflected on the Demand Note. The Trust must own the asset.