FAQs: Trust (revocable living trust)




1. Do I need to report the assets of a revocable living trust that I established for myself and my family?

Yes.  Although a revocable trust that someone outside your immediate family established for your benefit is not normally reportable, report the assets of a revocable trust that you established for yourself or your family.

2. I have a remainder interest in my father’s revocable living trust.  Is that reportable?

As with most revocable trusts, as opposed to irrevocable trusts, you generally do not report an interest in a revocable living trust, unless you, your spouse, or your dependent child is the grantor of the trust.  For a detailed discussion of revocable living trusts, see an OGE memorandum entitled “Revocable Living Trusts,” DO-02-015, dated June 11, 2002.  However, you should consult your agency’s ethics official if you are a beneficiary of a revocable living trust because trusts are often highly individualized and state laws governing trusts vary.

3. I received a discretionary distribution from my mother’s revocable living trust.  Is that reportable?

As with most revocable trusts, as opposed to irrevocable trusts, you generally do not report discretionary distributions received from a revocable living trust, unless you, your spouse, or your dependent child is the grantor of the trust.  However, you should consult your agency’s ethics official if you are a beneficiary of a revocable living trust because trusts are often highly individualized and state laws governing trusts vary.

4. Can you give me an example of an instance in which a revocable living trust established by someone for my benefit would be reportable?

Yes.  One example arises in the context of mandatory distributions.

In many cases, the trust instrument for a revocable living trust either will be silent as to distributions to beneficiaries or will make clear that such distributions are discretionary.

Normally, you do not need to report your interest in a revocable living trust if you are the beneficiary, rather than the grantor.  However, as an exception to this rule, report your beneficial interest in a revocable living trust if the trust instrument expressly directs the trustee to make present, mandatory distributions of trust income or principal to you (or your spouse or dependent child).  In such situations, even though the grantor retains the power to revoke the trust or change beneficiaries, the fact remains that the trust instrument gives you a right to present enjoyment of trust assets – not merely a future interest – and this present enjoyment cannot be interrupted except by an affirmative act of the grantor to alter the trust.

For a detailed discussion of revocable living trusts, see an OGE memorandum entitled “Revocable Living Trusts,” DO-02-015, dated June 11, 2002.

5. Do I report transactions involving the assets of a revocable living trust?

You need to report transactions in an Annual, Termination, or Periodic Transaction report if you, your spouse, or a dependent child is the grantor of the revocable living trust or received mandatory distributions during the reporting period.