Any accounting or tax gurus here?

[flatbutt]

Wow am I ever pissed! I opened a trust fund for the grandkids some years ago. We haven't touched in two years as there were no tax implications. My son went to the bank to update some info and they said the money was gone as it was an abandoned account.

Long story short we recovered the funds almost immediately but I'm worried about tax implications. I know if I deposit it I'll probably incur income tax on it.

I'd like to get it back into a trust for the kids but am struggling to determine any tax implications. We disn't withdraw the money this was a funds recovery if that makes any difference.

Any info from youse guys?

[Tobra]

I would be talking to some bank regulators on a deal like that. What did the branch manager have to say about it? I would be up that guy's ass so far I could see what he was eating before it got to his mouth.

[rfuerst911sc]

Assuming you still trust this bank , can't you ask them to correct their error ? Basically put the trust back in place . And make it perfectly clear you are NOT to incur ANY penalties . And you should continue to seek advice to get educated to make sure your butt is covered . Good luck .

[jhynesrockmtn]

Find a lawyer and/or CPA (many tax CPA's are also Lawyers) that has trust experience. Should be a fairly simple issue for them. Your trust as a legal structure should exist on it's own outside of where the funds resided. I believe anyway. It's also quite dependent on the specific documentation, revocable vs irrevocable, etc. I'm a former CPA but more of an audit and SEC guy than tax/trust, so my expertise is quite limited in this area.

[flatbutt]

I've contacted the lawyer that wrote the trust and waiting to hear from him.

[LWJ]

We have set up trusts for our children. They are at a big international bank/investment house. I would comfortably move a trust without taking $$$ to a different institution. But you should check first.

We also have a Special Needs trust for a child at a regular bank. It is a large national bank. They know the situation and don’t mess with it.

Flatbutt has an incompetent bank. Super weird that the bank did this. I am sharing my situation as a example of how it should and does work elsewhere.

Good luck. That sucks.

[ErVikingo]

Originally Posted by jhynesrockmtn

Find a lawyer and/or CPA (many tax CPA's are also Lawyers) that has trust experience. Should be a fairly simple issue for them. Your trust as a legal structure should exist on it's own outside of where the funds resided. I believe anyway. It's also quite dependent on the specific documentation, revocable vs irrevocable, etc. I'm a former CPA but more of an audit and SEC guy than tax/trust, so my expertise is quite limited in this area.

THIS!

I am also a CPA but I'm on forensics. Taxes are not my thing

The proof is on the legal details.

[flatbutt]

My financial advisor has said that she can transfer the money to her institution under the terms of the trust. I'm still waiting for the lawyer to get back to me.

[Zeke]

No CPA or lawyer here but a trust is a trust as an escrow is an escrow until it's closed. Easy for me to say. Good on you for thinking ahead about the boneheads that failed you.

I'm sure a letter to state and federal regulators will pay your fees, if any.

[flatbutt]

We may be home free on this. The money has been transferred to my financial advisors organization and she is managing the transfer. My CPA has assured me that given the manner in which I funded the trust has ensured that there are no tax issues hiding in the bushes.

I was told that the bank that held the funds had no responsibility to notify us that they were going to make the trust "unclaimed". I find that hard to believe.

[rfuerst911sc]

That is great news . Sounds like you found the right person/people to help navigate the stupidity of the other bank . I find it VERY hard to believe a financial institute can willy nilly close accounts without notification of the account owners .

[flatbutt]

Originally Posted by rfuerst911sc

That is great news . Sounds like you found the right person/people to help navigate the stupidity of the other bank . I find it VERY hard to believe a financial institute can willy nilly close accounts without notification of the account owners .

Apparently labeling the trust as "abandoned" isn't the same as closing the trust. So, the trust as written is still in force and it's just a matter of transferring funds between institutions. Whew!

BTW I'm done with commercial banks.

[rfuerst911sc]

Is there an implied rule that the trust will or has to see movement during a certain period of time ? I ask that because I am curious what time frame triggers the " abandoned " status ? The intent of a trust in general is it won't be touched for many years . Unless I'm wrong . Just seems fishy to me . Anyway you are getting it resolved and that's all that matters .

[berettafan]

bit of an aside Flattie but if the trust is generating no tax impact then it sounds like it's not generating any income. In that event I would suggest you consult your financial advisor and consider at least utilizing CD's or treasuries to help offset inflation a bit.

[pwd72s]

Originally Posted by jhynesrockmtn

Find a lawyer and/or CPA (many tax CPA's are also Lawyers) that has trust experience. Should be a fairly simple issue for them. Your trust as a legal structure should exist on it's own outside of where the funds resided. I believe anyway. It's also quite dependent on the specific documentation, revocable vs irrevocable, etc. I'm a former CPA but more of an audit and SEC guy than tax/trust, so my expertise is quite limited in this area.

I'm no lawyer, but it's my opinion Flat needs a good contract lawyer. The one Cindy & I used to set up our trust told us that he never goes to court because he writes trusts so there is no need to go to court.

While there, ask him about setting up a trust for your grandkids though a good mutual fund company...

[flatbutt]

I used a CELA attorney for my real estate trust as well as the grandkids trust.

[Tobra]

Stay far, far away from Bank of Montreal

[2ColdScorpion]

I’ve run into that before, if you’re claiming mileage, make sure it was logged accurately and clearly tied to business use. Keep your records in case the IRS asks later.