Estate Tax-Federal Estate Tax

John M asked:


I will receive an inheritance from my parents and want to establish irrevocable trusts for my children with that money.

I would like to assign my interest in some of the estate assets to an irrevocable trust to avoid gift tax in creating these trust after I receive the money. ( I would direct some of the money to go directly into the trust rather than taking possession of it)

The question is may I do this without incurring gift/income tax? The theory is that if I simply assign an interest to the trust and the executor of the estate then writes the check to the trust that I will never have received the money and cannot be taxed via gift tax like I presumably would if I received the inheritance and then transferred the money to trust.

I am aware of the various estate and gift tax credits and am not concerned with these, so we may presume they are inapplicable. All I want to know is if directing the post estate tax assets to go to trust will avoid a gift/transfer tax since these are post tax monies? I presume If I took the money and then transfered to trust the transfer would be taxable against me.

I’m also not interested in advice to seek an attorney’s opinion. I’m aware this is a good idea, but I’m asking ya’ll, and I can’t afford an attorney at the moment.

Edwin Sword

lady_bella asked:


and there is no estate tax, or inheritance tax in the state of NM or AZ, unless the estate is worth over 600 thousand dollars, then do I have to claim that next year as an Income Received on my tax return?

If anyone knows, or if there is a professional out there who can help me I would greatly appreciate it. Thanks so much!
kckid2: Thanks for your answer. The dividends are from my grandparents house that got sold after they passed away. And that was divided among 4 of us.

Sherril Pellegren