I have the following query which can be best explained with an example. I wish to set up a Private, Revocable Trust for meeting the education expenses of my grandchildren.
- The Trust will be funded by me (The Settlor) - grandfather.
- The Trustees will be myself, my spouse, and my son.
- The beneficiaries will be my 2 grandchildren.
It is expected that the expenses will be met from the interest / dividends earned by investments made by the Trust and that the capital will remain intact. My question is, on completion of the education, if the Trust is to be dissolved, what will be the Tax treatment for these amounts in the following cases:
a) IF the Trust Funds are given back to the Settlor (if alive)
b) IF the Trust Funds are given to the surviving Trustee i.e. Son
c) IF the Trust Funds go to the beneficiaries i.e. Grandchildren
Your guidance is highly appreciated.
CAclubindia
