Additional Information:

According to an irrevocable trust, as a income beneficiary, I am allowed access to the principal of my trust share trust only under certain ascertainable standards–h/e/m/s. Also, the “trustee’s determination shall be conclusive.  The trustee “shall” take into consideration my “income or capital resources from any source.”  Does this mean that if I have a large amount of resources outside the trust that it will be hard for me to access the principal, if at all? And if I do get access, will there be taxes I have to pay?

ATTORNEY ANSWER:

Under the terms of the trust, the Trustee may only distribute principal to you for your health, education, maintenance and support. As the trust instruments uses the verb “shall”, you will need to prove that your income and capital resources are not meeting your needs.

You should have a meeting the the Trustee to determine what the Trustee’s view on your standard of living. For example, if you are renting and wish to purchase a home, the Trustee may be inclined to see that as a support payment.

As you are an income beneficiary, the income tax liability generated from the trust will flow out to you when the income is distributed. The Trustee will issue a k-1 for you each year so that you will know what to report on your individual income tax return.

Margaret L. Cross-Beliveau, Esq., LL.M.

Legal Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on since each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship. A lawyer experienced in the subject area and licensed to practice in the jurisdiction should be consulted for legal advice.

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The attorneys at The Beliveau Law Group provides legal services for estate planning (wills and trusts), Medicaid (planning and applications), probate (estate and trust administration), business law (formation and operation), real estate (residential and commercial), taxation (federal and state), and civil litigation (in connection with these practice areas). The law firm has offices and attorneys in Naples, Florida; Boca Raton, Florida; Danvers, Massachusetts; Waltham, Massachusetts; Quincy, Massachusetts; Manchester, New Hampshire and Salem, New Hampshire.