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    Davlyn's Avatar
    Davlyn Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Feb 21, 2011, 04:56 PM
    Do you pay inheritance tax/incom tax on a living trust?
    cdad's Avatar
    cdad Posts: 12,700, Reputation: 1438
    Internet Research Expert
    		  
    #2

    Feb 21, 2011, 05:13 PM

    The answer is maybe. And here is why. If you create a living trust and your still alive. Then you are responsible for paying the taxes (income tax) of the trust. If the value of the trust is above the minimum value for taxation when it goes into dispersal usually the trust pays it at that time then the funds / property are dispersed.

    Also if you are creating one then it would be best to use a lawyer that has specific knowlage of trust accounts and there are 2 types of living trust.

    1) Revocable

    2) non-Revocable

    There is a huge difference between the two of them so please seek legal aid if your considering making a trust.
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