Tax implications of dispersing trust to my child's 529 plan vs directly to me
I will be inheriting a portion of my father's trust. My child is in college now, and I contribute the full amount to the trust every year. Are there tax advantages to disperse proceeds from the trust directly to the 529 plan? Second question: Since my name is on the trust, can both of us (me and the trust) contribute 00 each to the 529 plan?
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You should probably talk to an estate attorney (a lawyer duly licensed in your State) and a licensed tax adviser (EA/CPA licensed in your State) about this, as this may become tricky. It depends greatly on how the trust is defined and who are the beneficiaries.
You definitely need an estate lawyer and maybe a CPA. My estate lawyer was generally knowledgable about estate tax.
The gift tax exclusion is ,000 per year. Your 529 contributions are considered gifts. There is also something called a generation skipping transfer tax, the details of which I'm not familiar with.
The best advice would be dependent on how your father's will and trusts were set-up, and the rules of your state.
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